Speakers’ Corner: Retail MVNOs

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The retail sector has for many years, naturally, functioned as distribution channel for mobile airtime providers.

It has primarily been used as a facility for box shifting, and has used networks’ handset subsidies to attract customers to stores.

But as mobile telephony has become increasingly advanced, mobile airtime providers have started to use more specialist retail as a sales channel.

In recent years, a number of retail chains have taken on a more active role in mobile by becoming mobile providers. Many more retail chains are contemplating launching as mobile providers.

There are many reasons why retail chains would find it attractive to enter the mobile market as mobile providers.

Reasons for retailers to launch as mobile providers in their own rights are various and many, and briefly as follow:

• To optimise their distribution power.
• To maximise margins on their existing mobile portfolio, which have decreased in recent times.
• To gain new revenue from a new product set (mobile still offers good margins compared with ordinary goods).
• To increase company turnover, clearly.
• To build a valuable customer base.
• To keep up with competitors that have already entered the space.
• To supplement a loyalty programme with a mobile product.
• Simply, to extend a company’s brand.

Many UK retailers have already been quick to launch in the mobile market as providers in their own rights – Tesco Mobile, Asda Mobile, Virgin Mobile,  Talk Mobile from Carphone Warehouse.

The number of retail players entering the mobile market is growing and will continue to grow. Today many of the most important retail sector companies are either already in the mobile market – or scheduled to enter.

Full article in Mobile News issue 434 (March 9, 2009).

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