Moving beyond discounting – the next gen MVNO strategy

Moving beyond discounting – the next gen MVNO strategy

One of the factors that has fueled fierce and sometimes unsustainable price competition in mature mobile markets globally is discounting, used by many MVNOs to disrupt their market, facilitate market entry and grow their market share. In truth, prices have dropped so low in some markets that discounting on its own is no longer an effective differentiator, for a number of reasons. One of these reasons is that consumers no longer value the small differences in price, and another is that rivals can rapidly match discounted prices as soon as they are rolled out, neutralizing their effect and resulting in a race to the bottom.

New ways to differentiate

For MVNOs to continue to grow and, most importantly, deliver sustainable and acceptable EBITDA, they need to identify other techniques with which to differentiate themselves from competitors. A significant way in which network operators differentiate their offerings is network quality, an element which is also largely out of their control. MVNOs are therefore concentrating their efforts on four key areas for differentiation – ”The Four Secret Ingredients of MVNO Success”:

  • Increased efficiency
  • Customer experience
  • Product range
  • Pricing and bundling

By focusing on improving their performance in these areas, MVNOs can not only differentiate themselves from their competition, but can also create significant impacts on both their bottom line and top line revenues.

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Keeping customers happy

There are many reasons for this, but the end result is quite straightforward: keep customers happy. Happy customers do not churn, nor are they likely to complain, thereby costing MVNOs less to manage. What’s more, once MVNOs have a foundation of happy customers, they can then offer them a wider range of products, increasing the value of each customer by selling more to them. Better pricing, bundling and offers means that they can build loyalty, maintain interest and increase value – delivering bundles and offers that are more appropriate to each customer and more profitable for the MVNO.

As a strategy, discounting is not going to disappear; furthermore, it will remain important. However, this is a clear opportunity for MVNOs to create greater value by focusing on these core elements to create a virtuous cycle of benefits.

To find out more about the MVNO market and how MVNOs can utilize key growth strategies, to access our full 1-hour webinar recording. Learn more, download our complimentary MVNO Market Review 2015-16 white paper.

Moving beyond discounting – the next gen MVNO strategy