Australian Mobile Market: What drives success for mobile virtual network operators

By Optus Wholesale

The Mobile Virtual Network Operators (MVNO) global market is valued at over $51 billion by the end of 2016 and is expected to exceed $85 billion by 2022* While MVNOs have established their firm footprints in Australia, 2017 will be a period of change and transformation across market dynamic, technology advancement and customer demand.

We talk to John Castro, Head of Marketing and Strategy, Optus Wholesale to learn more about what lessons MVNOs can learn from current players? And how MVNOs and Mobile Network Operators (MNOs) can share insights and guide one another to better anticipate and innovate to meet evolving market.

“The MVNO business model is not a scale game but a niche game in which players have to continue to find innovative ways to differentiate”.

Leverage brands and targeted market segments

Recognisable brands with a MVNO business model such as Virgin Mobile have been successful in bringing choice to the marketplace. First launched in 2000, Virgin Mobile has a unique brand positioning and product offerings targeted to specific demographic cohorts. By leveraging the strong existing brand asset of the global Virgin Group, the company was able to gain traction in the market with cost effective PR and social-by-design marketing activity.

Expand product offerings into adjacent market

With nbnTM going mainstream in 2017 and providing a level playing field for service providers. There’s a real opportunity for MVNOs to broaden their product offerings and expand their established brands to the adjacent fixed market.

amaysim, Australia’s largest independent MVNO with a customer-base of over 1 million, is a great example of a brand that employs this strategy, the company recently announced their imminent expansion into nbnTM services. With their plan to offer fixed services to existing mobile customers, amaysim increases the ability to grow customer loyalty and broadens their market appeal.

Focus on customer experience

As the Australian mobile market dynamic is changing, MVNOs are increasingly looking beyond pricing as a competitive mean. Castro argues that they must place their customers at the centre of their business by concentrating on the customer lifecycle and how they can add value to customers’ everyday lives.

For instance, Jeenee Mobile a social enterprise has carved out a niche market segment by developing specialised mobile services for people requiring extra support, such as those living with a disability or recovering from medical issues. They tailor their offerings by providing a 24 hour help line which can be accessed through a simple mobile app on their customers’ smartphone. Jeenee Mobile is a great example of creating strong affinity and advocacy amongst specific customer-segments.

Moving beyond traditional telco operating model

Being asset light and more operationally agile, MVNOs can personalise offerings that align to niche customer needs. As a recent example, Ovo Mobile launched in Australia as the first disruptive hybrid telco and content startup. With the tagline #FortheFans, Ovo partners with sporting brands that are not usually accessible through mainstream media. Ovo uses their expertise in content production and reach of the Optus mobile network to offer subscription based content for targeted sporting fans. With the ability to build a unique customer proposition around their customer’s sporting interest, Ovo Mobile differentiates their services beyond price.

Build a win-win relationship with Mobile Network Operators (MNOs)

Rather than attempting to build capabilities from the ground-up, MVNOs can look at their current MNO partnerships to take advantage of technological innovations. Whether it’s content differentiation or emerging technologies such as Internet of Things , MVNOs need a partner who take capability building seriously and invest in new technologies for the wholesale market.

“Partnerships are critical for businesses looking to disrupt their industries. Optus Wholesale wants to help MVNOs in their transformation by providing them with uncompromised and differentiated services to their customers.

We’re incredibly proud of our network and have never been a business to rest on our laurels in terms of looking for areas of improvements.” Castro said

As MVNOs plan for a disruptive era, Optus Wholesale is looking forward to working together to help them stay ahead in the ever changing mobile market.

(*Source: Global Market Insights Feb 2016)