The mobile virtual network operator (MVNO) market has got suddenly broader and more intensely competitive in the UK. It has also become a more essentially strategic part of operator business. The reasons, in the main, are threefold and simple: the market’s struggle for revenue growth in the first instance, and the contrary impact upon it of economic recession and new popularity of mobile data.
Orange joined this battleground late. By the time it had agreed in 2008 with ethnic market provider Lycamobile to run a proposition off its UK network, Virgin Mobile had been at it for years with T-Mobile, and supermarket chains Tesco and Asda had grown successful mobile operations with O2 and Vodafone respectively. Even the UK ethnic space had got busy; Lebara Mobile had enjoyed a free run at it with Vodafone for most of a year already, with competition only from smaller providers Nomi Mobile (piggybacking Vodafone via a deal with BT Mobile) and, for a time, IDT Mobile (with Orange, but now in a “holding pattern”).
But of all UK network operators, Orange appears to have made the most of the economic downturn in wholesale terms, even as such major brand partnerships got rarer in the gloom. Orange UK vice president of wholesale, business development and partnerships Marc Overton explains: “MVNO [business] has been only relevant to really big companies with significant customer bases and cashflow to build mobile operations. And there are still a few of those [opportunities] in the UK. But the recession made clear a number of those businesses had other priorities.”
By which he means candidates with sufficient brand and distribution capability for large MVNO ventures have been compelled in the financial climate to redouble focus on core activities. Orange has worked with these limitations to develop revenue streams, and ways to sweat its network asset. Overton says there is a new and expansive “spectrum of engagement”, which Orange is leading defi nition of.
“On one side, you have the telco guy, like Lyca, who wants access to the network and to run everything. At the other extreme you have these media luvvies, or someone who hasn’t a clue about telecoms but knows the iPhone has changed the landscape and the way people consume media.
“And then, somewhere in the middle, there is this new aggregator model, which requires investment but is handled in conjunction with a third party and does not require being bogged down in process.”
Full article in Mobile News issue 461 (April 12, 2010).
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