How can MVNOs deliver organic customer growth in saturated markets?

How can MVNOs deliver organic customer growth in saturated markets?

Telesperience’s Teresa Cottam looks at what MVNOs can do to deliver against their aggressive growth plans.

The press frequently reports fairly negative or cautious outlooks for telecoms service providers. Yet one group remain generally bullish about their prospects – mobile virtual network operators (MVNOs).

According to a seminal study into this market conducted by Telesperience in late 2015 (see here), globally the average growth rate that MVNOs are forecasting is 23% per year between 2015 and 2017 (or 45% over the period). In this study we also asked MVNOs how they intended to fuel this growth, with organic growth of customers perceived as a primary growth driver by 83% of MVNOs. In 2016 we revisited this question and discovered that now even more MVNOs (88%) believe organic growth will be their key growth driver.

This raises the question as to how MVNOs intend to attract more customers and retain existing ones when they tend to operate in saturated markets where virtually every ‘new’ customer must be attracted away from a rival?

Typically, the first strategy MVNOs use to gain market entry is to offer a lower price point than competitors (discounting). This strategy only has a limited window of opportunity though since it’s easy to duplicate and MNOs can absorb lower costs more readily should they be so inclined. MVNOs are therefore challenged to find additional ways to differentiate themselves.

Thus the MVNO needs to find some differentiating element that overcomes customer inertia. These differentiators tend to lie within the domain that MVNOs are good at – targeting, marketing, packaging, pricing and product innovation.

Today there is still limited tailoring of telecoms services to customer needs. Products tend to be assembled into packages aimed at usage, rather than focused on the actual needs of customers. This lack of maturity presents a huge opportunity for MVNOs. By better understanding their customers and creating packages that address their needs more precisely, by crossing the divide between basic telecoms (voice, SMS, gigabytes), digital value-added services (security, quality of service, content) and non-telecoms services such as insurance, money and banking, physical goods and so on, MVNOs can create more complete solutions or packages for their customers.


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This opportunity requires MVNOs to build on their understanding of the niche they are targeting to create relevant offers for that community – moving beyond their own services to work with partners that are able to offer service elements and products that appeal to their customers.

Ultimately, MVNOs need to retain customers as well as attract new ones in order to deliver overall growth. But by delivering on customer expectations, creating fresh and relevant offers, and being a source of appealing products, MVNOs can create a win-win of both attracting and retaining customers – growing market share and profitability.

How can MVNOs deliver organic customer growth in saturated markets