Towards 4G MVNO.
The limitation of existing MVNO models
I already described the limited successes of the MVNO model, mainly light MVNOs, in my previous posts. This is of course due to the technical limitations of the technologies used, but mainly to the fact that mobile incumbent operators looked at MVNOs only as means of supplementing their own sales effort, definitely not as partners: to address market niches that incumbent mobile operators had difficulty to address, while leaving them just enough margins to survive, and usually ultimately buying them back or getting back their customer base when bankrupt.
The limitation of the new 4G offering by incumbent mobile operators
As described in an earlier post, based on the French example, we have seen that the mobile data market has not exploded last year, while rival mobile operators introduced affordable unlimited schemes. It seems to show that indeed mobile operators have not convinced consumers that they provide true added value services, as the churn towards the new mobile operator and subsequent price decreases showed it. The current presentation of the 4G services as a mere increase of download speed also supports the unlikelihood that mobile operators would be able to transform this new technology in long term companionship with their customers.
The offering party legitimacy
I already mentioned the US example of the car industry, where soon all vehicles will be equipped with 4G systems (phone, internet, GPS, TV streaming, maintenance services), making it a self sustaining universe where the car manufacturer clearly provides a long term added value (as long as the duration of the car at least) to the consumer. This clearly show that brands or distributors without any legitimacy in telecommunications can provide the right telecom offer to their customers, and so vastly improve their customer relationships on the long term.
Business Telecommunications operators
However, there is clearly a segment of the telecommunication industry that needs to quickly leverage the new mobile paradigm, or disappear: the numerous fixed line business communication operators. 4G services clearly finally allow business customers to get convergent fixed/mobile services: access to company tools and software through any device (PC, phone, tablet etc) any way (wireless or wireline) anywhere. However pure fixed line operators may not be in a position to provide those services if they do not master their core (IMS) convergent fixed/mobile network. Resale of mobile services will not be sufficient, as business customers would require true convergence. I already wrote on BT in the UK, who is currently trying to conclude a new partnership for 4G with a mobile operator, and I believe this convergence of services is the key driver.
The 4G MVNO evolution
I believe all the numerous wireline business customers telecommunication operators will have to do the same. And as there are far more fixed lines operators than mobile operators, I believe the way forward will be to establish a new 4G full MVNO concept (for full/light MVNO differences, see my earlier post), whereby fixed operators could provide truly convergent added value services to their customers. And one can believe that what is necessary for business customer operators will be widespread in the residential field, where basic consumers would want access to their services anywhere, anytime, by any mean (wireless or wireline). That is where brands and distributors would be the most appropriate to develop added value offers, at least more appropriately than telecom operators.
Impacting even mobile operators
If we focus back on the business telecommunications sector in Europe, we can see how difficult it is to access our company tools when travelling abroad, far from our domestic mobile operator: most of us are obliged to try to find a WIFI connection with difficulty. And indeed even the large pan-European mobile operators have a limited footprint: none is serving the 5 most important European countries. So the market evolution would require even physical mobile operators to start (MVNO?) operations in countries where they are not mobile operators to accompany their customers. The regulation change driven by the European Union making Europe a single telecom market without domestic borders and specific national regulations should accompany and facilitate this move.
The Mobile incumbent operators will need to reinvent their relationships with a crowd of partners eager to provide added value services to their customers based on 4G and those new convergent telecommunications capabilities. This of course requires a different way to manage an ecosystem of partners, who have their own business rationale, who need to be treated as equals by mobile operators so they can develop their added value on the long term on the market.
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