Unlocking the power of digital transformation for MVNO monetization

In the rapidly evolving telecom landscape, MVNOs must embrace digital transformation to thrive. Learn why and how from Counterpoint Research.

The significance of digital transformation for MVNOs

In today's rapidly evolving telecommunications landscape, digital transformation plays a pivotal role for Mobile Virtual Network Operators (MVNOs). As the industry experiences a surge in technological advancements and shifting consumer expectations, MVNOs find themselves facing both unprecedented opportunities and challenges.

Digital transformation is more than just a buzzword; it has become a defining strategy for MVNOs looking to maintain relevance and competitiveness in this ever-changing landscape.

The expanding MVNO landscape

Globally, there are nearly 2,000 MVNOs, with over half of them operating in Europe. Interestingly, the number of MVNOs outpaces that of traditional mobile operators worldwide, highlighting their growing presence. Despite thin profit margins, new MVNOs are emerging worldwide, with estimates suggesting that their numbers will exceed 2,500 in the next five years.

Digital transformation simplifies MVNO launch

The digital era has streamlined the process of launching an MVNO service. Thanks to digital tools, cloud-based network solutions, and innovations like eSIMs, MVNOs can now establish themselves more swiftly. Traditional MVNOs used to spend considerable time building technological infrastructure, but this has shifted. Today, the focus is on creating contracts with Mobile Network Operators (MNOs), making digital transformation a top priority for both existing and new MVNOs.

Diverse MVNO types, unified need for digital transformation

MVNOs come in three primary types based on their degree of control over the value chain. Full MVNOs, Thin MVNOs, and Reseller MVNOs all have distinct levels of control. However, irrespective of their type, all MVNOs require digital transformation to thrive.

Why MVNOs must embrace digital transformation

Competition and price pressures have intensified, compelling MVNOs to innovate and differentiate themselves. They must focus on both value propositions and cost efficiency to remain competitive. Digital technologies empower MVNOs to become "DIGITAL" – Differentiated, Intelligent, Growing, Integrated Telcos that are Agile and Customer-Centric.

Key reasons for MVNOs to adopt digital technologies

• Differentiated: While competitive pricing was once a primary selling point for MVNOs, the landscape has evolved. Customers now expect comprehensive digital solutions that go beyond basic connectivity. Diversifying portfolios with digital products and services sets MVNOs apart. Yet, the true differentiator lies in exceptional customer service, made possible through digital tools and platforms.
• Intelligent: Digital platforms generate valuable data on customer behavior, preferences, and usage patterns. MVNOs can leverage this data to craft personalized service offerings and refine marketing strategies. The integration of artificial intelligence (AI) further enhances operational efficiency and competitiveness.
• Growing: Digital operations enable scalable and efficient processes, reducing operational expenditures. MVNOs can adapt to changing market conditions quickly, launching new services and plans within minutes.
• Integrated: Digital technology facilitates seamless integration within MVNOs, fostering collaboration among departments and ensuring a customer-centric experience. Software-defined networking (SDN) and network function virtualization (NFV) enhance network infrastructure.
• Agile: Agile MVNOs excel in service deployment and responsiveness to market demands. Digital platforms expedite service launches and product development, providing a competitive edge.
• Listening: Digitalization enables MVNOs to engage with stakeholders and gather feedback. Self-care applications streamline customer lifecycle management and enhance customer satisfaction.

Challenges in MVNO digital transformation

MVNOs face challenges in comprehending the intricate technology stack required for digital transformation. This includes telecom core networks, digital platforms, cloud services, device management, billing systems, CRM solutions, APIs, and analytics. Resource and time constraints often hinder MVNOs from fully grasping these elements.

Delivering superior customer experiences

Digitalization goes beyond having applications; it requires continuous refinement of user experiences. Users now demand impeccable digital encounters, making user satisfaction an ongoing journey.

Overcoming cost barriers

Digital transformation can be costly, particularly for smaller MVNOs. Initial financial outlays for new technologies, staff training, and process restructuring can pose significant challenges. Despite these barriers, the benefits of digital transformation are undeniable.

Steps for MVNOs to successfully embrace digital transformation

To overcome these challenges and succeed in digital transformation, MVNOs can take several steps:

• Clear vision and strategy: Assess current operations, identify pain points, and set clear objectives for digital transformation. Create a roadmap outlining the necessary steps.
• Choose the right technologies: Select digital technologies that align with specific needs and goals, considering factors like cost and scalability.
• Low upfront investment: Look for solutions with low upfront costs and flexible payment models like Software as a Service (SaaS).
• Fast time to market: Leverage cloud-based solutions to accelerate service launches and innovation.
• Choose the right partners: Select partners with future needs in mind, focusing on flexibility and experience.
• Intuitive customer journeys: Prioritize creating intuitive user experiences, and choose partners who can showcase best practices.
• API-driven approach: Implement APIs for flexibility and scalability, ensuring compatibility with third-party services and platforms.
• Automation and self-care: Automate processes like customer onboarding, billing, and marketing to reduce costs and enhance the consumer experience.

In conclusion, digital transformation is essential for the success of MVNOs in a highly competitive telecom landscape. While challenges exist, the benefits of embracing digitalization are substantial, and with the right vision and strategy, MVNOs can position themselves for long-term success in the digital age.