How to Start an MVNO
In this article, we walk you through the four core elements of launching your own Mobile Virtual Network Operator (MVNO) / Mobile Brand. You’ll need…
- A Business Plan
- A Marketing Plan
- A Financial Plan
- The Right Service Provider / Solution Provider
Ready to launch your own mobile brand? Chat with one of our MVNO experts to get started!
STEP 1: Create a Business Plan for Your MVNO
As with any business, MVNOs require solid business plans. You’ll want to consider things like how many subscribers you expect to attract, your 3-year forecast for monthly subscribers, and, of course, your budget. In addition, your plan should address the following questions…
Where do you want to offer your services?
This is pretty straight forward. If you want to offer mobile services in just one country, or even a city like Chicago or Bogotá, you’ll need to identify a host network that operates in that area. If you want to sell your services in a specific region, such as the European Union, you might need to partner with multiple providers to guarantee high quality services. Identifying which country(ies) or region(s) you want to serve is an obvious but necessary step when planning your MVNO.
How many competitors do you have?
Another obvious one — identify your competitors. These days mobile service providers are more abundant than ever. Not only will you be competing with national Mobile Operators like AT&T, Vodafone, and Orange, you’ll also be competing with other MVNOs. What’s more, MVNOs are beginning to address increasingly niche markets, meaning there will likely be a lot of overlap in terms of customer profiles.
Who is your target audience?
MVNOs begin with the assumption that mobile network operators (MNOs) don’t appeal to all audiences. Perhaps their branding lacks character, their data plans are too rigid, or they simply lack exciting incentives. So, the first thing you should do is focus on audience segmentation. Come up with ideal customer profiles by identifying specific communities, niche markets, socio-economic groups, or existing customer bases that you think can be successfully lured away from major carriers.
What gap in the market are you addressing and how will your mobile service differ from others?
Once you’ve defined your audience, you will need to persuade them to sign up for your service instead of trusted, big-name carriers. That’s not an easy task, so it’s important to identify what specific needs your MVNO addresses and how it will differ from other offerings. For example, you can offer more flexible data plans to accommodate low-income subscribers. Alternatively, if you’re targeting a specific niche, such as sports fans, you can invest in co-branding and team partnerships.
How will you price your plans?
Following on from the previous point, one of the easiest ways for you to differentiate your MVNO from MNOs is to offer more appealing pricing. While this could mean giving low-income or low-consumption consumers the ability to set bespoke monthly plans, it could also be something a little more innovative, like facilitating payments via blockchain or the ability to tokenize and exchange mobile data. So, you should figure out how you want to price your plans, what they’ll include (voice, data, SMS), etc.
Do you plan on offering prepaid plans, postpaid plans, or both?
On prepaid phone plans customers pay upfront, whereas on postpaid plans they pay their bills at the end of the month. There are pros and cons for both. For instance, while prepaid plans are less expensive and don’t require credit checks, postpaid plans tend to include more perks, such as entertainment or travel features. These options also carry different implications for how much data you require, your rating and billing practices, etc.
Do you plan on bundling products?
Bundling is another way for you to differentiate your MVNO. For instance, you can offer global Wi-Fi access as a perk. You can also offer non-telco services to “sweeten the deal” and differentiate your product.
How much flexibility do you need for your MVNO?
Finally, once you have an idea of what your offering will look like, who your customers will be, and what will differentiate your product, you will need to figure out what is required to make it all work. This means you’ll need to figure out how much control over your products, services, and internal systems is necessary.
Finding the Right MVNO Configuration
One reason it’s so important to answer the questions above is that, at some point, you’ll need to decide how to configure your MVNO and which “type” of MVNO is best for your business.
Broadly speaking, there are three MVNO configurations:
- Branded Resellers
- Light MVNOs (or Thin MVNOs)
- Full MVNOs (or Thick MVNOs)
Let’s take a closer look at each…
Branded Resellers are MVNOs that use pre-defined settings, tariffs, and bundles from existing solution providers (MNOs, MVNOs, MVNEs, etc.) and sell them under their own mobile brands. Since they use ready-made environments, they can focus on other parts of the business — such as sales, marketing, relationship-building, etc.
Of the three primary types of MVNOs, Branded Resellers are the most lightweight, making them the easiest to set up, with the lowest barriers to entry.
Want to become a Branded Reseller? Click here!
Light / Thin MVNOs
Just like Branded Resellers, Light MVNOs rely on host networks and solution providers for operational management and Core Network elements. However, unlike Branded Resellers, they have substantially more control over other parts of their business. Light MVNOs can define their own services, create their own bundles, manage their own plans, etc. Indeed, Light MVNOs have full control over their applications and services, rating and billing, customer care, and sales and marketing.
Want to launch a Light MVNO? Click here!
Full / Thick MVNOs
Finally, Full MVNOs are the most sophisticated option. As a Full MVNO, you will typically have complete control over everything except radio access, which remains in the purview of MNOs. You will be able to define your own offerings and services, while managing all core network elements, rating and billing, customer care, etc.
Want to launch a Full MVNO? Click here!
STEP 2: Create a Marketing Plan
The next step is to create a marketing plan. Here, you need to define your go-to-market strategy. Begin by answering the following questions:
How will you reach subscribers?
In other words, what channels will you use to market to your target audience? For example, if your MVNO was designed for kids or teenagers, you might want to focus your advertising on Social Networks like Facebook, TikTok, and Instagram. However, MVNOs can be designed for just about any segment: religions, political affiliations, sports clubs, even groups like “Bird Watchers of America.” Each of these segments has different habits and interests, so you’ll want to choose your marketing channels according to your audience’s profile.
What is your brand identity?
Once again, if your target audience is younger, you’ll want to adopt hipper creative. Your brand’s voice should match your customer.
How and where will subscribers sign up for your services?
Will you open brick-and-mortar stores, set up an online retail site, rely on resellers, operate kiosks in malls or other commercial venues, etc.
This will give you an idea of where you want to go. From there, you can determine your anticipated marketing spend, how quickly you would like to scale up your marketing initiatives, what your personnel requirements are, and what tools and systems are necessary to make everything work.
STEP 3: Create a Financial Plan
Once you have put together your business and marketing plan, you’ll need to get your finances in order. Here are the relevant questions you should answer:
How much will it cost to launch your MVNO?
What are your upfront costs? What is your overhead? How much will your service agreement(s) cost? What tools and systems will you need? How much will it cost to purchase and ship SIM cards? Will you need an office building or any other physical location?
What are your workforce requirements?
How many employees will you need, what will they be doing, and how much will they cost? If your MVNO is part of a larger business, such as a retail brand, how many of your existing employees can be converted to MVNO employees? If you rely on resellers or agents, how much margin will you give them?
How much will you outsource and what will the associated costs be?
Depending on your MVNO configuration, you might rely on third parties to manage things like marketing, customer support, billing, collections, etc.
How much money can you invest and how much will you need from external investors?
As noted above, MVNOs can be quite affordable to launch, especially if you go with the Branded Reseller route. However, if you want more control over your services and to approach a broader target audience, the numbers will add up quickly. It is critical to figure out just how much you’ll need.
What is your expected margin per subscriber?
This is an important benchmark that will help you gauge your success as you build your mobile brand.
When do you expect to be profitable?
Your break-even point is another important benchmark. It will help you monitor the success of your launch.
STEP 4: Select the Right Service Provider / Solution Provider
Once you have put together a business plan, outlined a marketing strategy, and gotten your financials in order it is time for you to build! For this, you’ll need a good solution provider that can help you launch your mobile brand and make your plans a reality.
This is where we here at Pareteum come in! We offer a comprehensive MVNO solution that can facilitate a wide variety of sophisticated mobile brands and services. With Pareteum, you’ll be able to build a Branded Reseller, Light MVNO, Full MVNO, and even an MVNE (Mobile Virtual Network Enablers)!
To learn more, reach out to our telecommunications experts!
Pareteum is an experienced provider of Communications Platform as a Service solutions. We empower enterprises, communications service providers, internet service providers, mobile operators, full MVNOs, light MVNOs, early-stage innovators, developers, IoT (Internet of Things), and telecommunications infrastructure providers with the freedom and control to create, deliver, and scale innovative communications experiences.
The Pareteum platform connects people and devices around the world using the secure, ubiquitous, and highly scalable solution to deliver data, voice, video, SMS/text messaging, media, and content enablement.
For more information on Pareteum’s MVNO solutions, set up a meeting!