Set Up MVNO UK, Engaging a Mobile Network Operator directly part 3
By Shams Moghul firstname.lastname@example.org
If you haven’t already seen part 1 and2 you can see them here now:
Engaging directly with a UK Mobile Network Operator. Part 3.
We are talking about setting up a UK MVNO and engaging a mobile network operator directly. I have been asked a number of times in regards to this method while companies are trying to establish a MVNO. The answer relatively always stays the same and i really want to discuss it here. One of the questions is:
What kind of information may be requested by The Mobile Network Operator before they may consider providing a set of commercials?
According to my experiences and industry knowledge, quite possibly these are the types of questions a Mobile Network Operator may require you to answer before they can begin to take your potential MVNO seriously.
1) What would be the brand name for the execution of the new MVNO?
2) Do you actually own this brand name?
3) Is this an Existing Brand name? or are you establishing a new one?
4) If you were to begin to execute your new MVNO, what size of subscriber base do you expect to achieve?
5) How do you intend on distributing your new product?
6) How would you manage your subscriber base?
7) How do you expect to satisfy fulfillment to end consumer, i.e delivery of product?
8) What level of financial support has this project received till date?
9) What level of managerial support has this project received till date?
10) What commercial model are you looking to engage with, for example, Full MVNO, MVNO Lite, RAN (Radio Access network)
11) Can you explain/share what headline customer commercial proposition might be ATL?
12) What is the USP for the business (i.e. what would make a current 02-VF-EE customer snap their SIM and move to your MVNO..?)
Depending on the answers to the above questions it will be decided if you have the ability to deliver the scale for a Mobile Network Operator to engage in a direct commercial contractual discussion. If the Operator decides your MVNO does not have the scale and growth they may refer your MVNO to an MVNE.
So what kind of scale are the Mobile Network Operators looking for before they consider engaging.
To give an exact figure of the kind of scale the operators require before they consider engaging is very difficult and each case differs hugely. I will try my best to give an accurate guideline, anything i provide here should not be quoted but used as a guide.
For a UK Based Mobile Network Operator to work with a direct engagement to establish a MVNO, they may possibly be looking for:
REVENUES: Between £10m to £15m Wholesale Revenue in say Year 3 – Year 4,
Projected Subscribers: A subscriber base of between 350,000 – 500,000 Active Customers.
Initial Outlay: Between £1.6 Million to £3.0 Million Capex.
If you are engaging a mobile network operator directly, make sure you have the scale and growth, make sure you have vast investment funds on standby. if this is not the case then it would be fitting to discuss your new venture with a MVNE.
Traditionally it has been a very expensive and complicated process to become an MVNO. The Mobile Network Operators have always charged sums in the hundreds of thousands of pounds if not millions. These come with huge monthly volume commitments based on a very stringent business plan process with specialist telecoms and billing engineers being required to integrate new systems with the MNO’s core network. All of this, of course needing to be in place long before the operation is able to launch, and start to earn revenues to repay these vast initial investment costs. This means that only companies who already had significant Telecoms experience, trained engineers, interconnection equipment and large investment funds are able to break into the space.
Its not all doom and gloom, if a mobile network operator cannot fulfill your requirements there are other options available. I have already mentioned the MVNE route.
Another route is to engage certain VOIP telcos, VOIP companies that have managed to negotiate innovative business models with MVNE`s. VOIP companies have manged to negotiate SIP interconnects through MVNE`s allowing these resellers to create, control, manage and set up MVNOS. These VOIP companies have their own switches, CRM systems and multi level customer facing portals for end user control. Some of these VOIP companies offer lower set up fees, Is this a risky business model?, and has their been any recent successes with these types of models.? please do let me know…
I really hope some light has been shed here. Good luck….
Written by Shams Moghul, email@example.com
posted on MVNOBlog.com