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SUMMARY
Tier 1 mobile network operators ("Tier 1s") refer broadly to the early
entrants in a mobile market who have built significant market share and brand
recognition. This report introduces MVNOs from the perspective of a Tier 1
operator. We summarise the factors influencing the market, the various types
of MVNOs, the reasons for partnering with them and a summary of the risks that
MVNOs may pose.
Tier 1s may choose MVNO partners that already operate successfully in
well-defined market segments. This report highlights the need for Tier 1s to
identify the criteria they require to assess each potential partner in their
market. The benefits for Tier 1s of hosting MVNOs are often unclear, and they
may conclude that there is no strategic advantage. This report highlights
examples where MVNOs have created value for Tier 1s with their business
models, and where Tier 1s have missed opportunities with innovative partners.
TABLE OF CONTENTS
1 Overview
2 Why should Tier 1s care about MVNOs?
- 2.1 Maturing markets
- 2.2 Consumers driven primarily by handsets and by basic service price
- 2.3 Subscriber acquisition costs
- 2.4 Allow others to address specific segments? and let them shoulder the
risk
3 Strategies for Tier 1s to accommodate MVNOs
- 3.1 Decide the policy for partnerships with MVNOs
- 3.1.1 CBB & Telmore in Denmark
- 3.2 Determine the potential partners and the types of possible competitors
- 3.2.1 Price/Value
- 3.2.2 Affinity players
- 3.2.3 Community segmented
- 3.2.4 Lifestyle & technology players
- 3.3 Be selective: choose the right MVNO partners
- 3.3.1 A strong brand allied with a smart marketing plan
- 3.3.2 Ambitious growth plans, and realistic growth potential
- 3.3.3 Distribution network and customer touchpoints
- 3.3.4 Strategic benefit
- 3.4 Partner with MVNEs?
- 3.5 Negotiate the right wholesale agreements
- 3.6 Look to create value for shareholders
4 Risks
- 4.1 Cannibalisation, or a reduction in the value of the market?
- 4.2 No sure-fire certainties
- 4.3 Customer ownership and development
- 4.3.1 Saunalahti, TeliaSonera and Elisa in Finland
- 4.3.2 Customer development
- 4.4 Rivals aggressively signing new MVNOs
- 4.5 Is it necessary to partner with MVNOs?
5 Conclusion
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