Sky an MVNO – is that the limit?

Written by on February 4, 2015 in Opinion with 0 Comments

Businessman hand press play button sign to start or initiate projects as conceptAnnouncements are coming thick and fast in the UK. First Sky said it was partnering with O2 to broaden its already wide range of services. This is due to be launched in the Spring of 2016. Now Carphone Warehouse, the original Vodafone reseller that was launched way back when phones were only viable in cars (thus the name) is announcing a deal with 4G network, 3.

On the face of it this seems slightly mad. Surely by now customers have bought the phone(s) they want, and surely they are not going to change provider. In a market such as the UK, where BT has remained viable because of the wonderful inertia of the British people, do we need another brand, or two, or three? But with BT itself discussing an entry into mobile via EE brands and operators are throwing their gauntlets into the market in any case.

Yet the timing may be good. Google certainly thinks so.

A recent survey by Telecoms.com came up with findings that point to two fifths of customers ready to subscribe to multiplay services and a third already on board.

Questions, of course, need to be asked. With Vodafone’s longest standing and highly successful reseller teaming with the opposition, what will Vodafone make of this move? Will Carphone Warehouse promise not to sell their branded service before Vodafone’s? Will Sky leach customers off O2’s native service? Does it, actually, matter?

It may be that attracting a large wholesale customer is easier to manage and ultimately more profitable than attracting and managing retail customers. Linking with brands that have sex appeal – such as the original tie up between T-Mobile and Virgin – certainly brings success. When that relationship was well established, a survey found that T-Mobile had the worst network quality and Virgin Mobile had the best. That is the power of partnering with a ‘sexy’ brand.

But launching and running an MVNO is not easy. As Ed Finegold says in the most popular article ever penned for BillingViews, there are the session and call records to manage and aggregate (and who does that?), product catalogues to design and get right and scaling and managing the changes in the business which will prove to be tough. Very tough. Ed’s article came in response to the 50 or MVNOs that appeared in the US in 2013.

The bottom line is that we are entering, or perhaps re-entering, a period where a slew of MVNOs will appear – and perhaps disappear. As long as customers think it is a good idea, then good luck to them. But with coverage and network quality still huge issues, at least in the UK, brands that venture into the MVNO space need to be careful that they do not suffer because of someone else’s bad coverage.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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