interview


Q&A with Whitey Bluestein, Bluestein & Associates

Telecommunications tower

Ahead of MVNOs World Congress 2018, we spoke with Whitey on the state of the MVNO market in the US, the growth areas for Wholesalers and the implications of IoT/M2M on the MVNO space. Read the interview to discover Whitey’s comments on these topics and many more.

Can you take a moment and describe what you do at Bluestein & Associates?

I work with clients as their corporate development executive, developing carrier relationships, negotiating deals with operators and strategic partners, and helping them get to market faster. Clients have included big players like Google, Disney and Cisco but I work mostly with early stage, funded technology companies in the mobile, IoT, cloud, AI and wearables spaces. Based in San Francisco, I have clients all over the US and the world, including the UK, EU, Australia, and Asia. The bulk of my work during the past five years has been in the fast-growing IoT and cloud space, including:

  • Managing strategic relationships for Orion Labs, a cloud platform for voice services, messaging and IoT;
  • Negotiating a connectivity deal for an asset tracking company;
  • Working with IoT partnership teams and wholesale groups at all of the leading North American operators and a few global data service providers on behalf of several clients; and
  • Advising several early-stage companies on business strategy and go-to market planning.

What is happening in the US MVNO market?

The US mobile market has never been more competitive than it is today. Operators like AT&T through GoPhone and Cricket, T-Mobile and its MetroPCS unit, and Sprint, including Boost and Virgin — all have very competitive prepaid offerings that are compelling from a price and value standpoint. Tracfone is also a serious competitor in the US market. Many of their plans include unlimited voice and/or data, so this has put additional pressure on MVNOs to be creative in their pricing and offers. Entry in the last year by cable giants like Comcast, Charter and Altice USA (formerly Cablevision in the Northeast) are so far showing very promising numbers with bundled offerings. On the retail side of the traditional mobile voice and data market, it seems like everyone is fighting over the same customers.

What initiates have been undertaken by operators to stay ahead of the curve?

T-Mobile has been the most aggressive and creative in its “Uncarrier” initiatives, which have included free Netflix, free international data roaming, unlimited streaming, inflight texting, free mobile hotspot data, and other consumer offerings. These initiatives, along with aggressive pricing, have resulted in very strong growth for them.

Will operators ever be able to regain their position in the market as key innovators?

The iPhone, now more than ten years old, and Android, have resulted in millions of applications that frankly have seized the innovation initiative, especially for residential customers. What service can an operator offer a residential customer that is not already available today on their smartphone? There are still enterprise initiatives around cloud, security and other network-based solutions where operators can innovate, but operators are now more focused on network buildout to meet growing demand for data, and IoT, M2M and connected devices for growth, new revenue, new connections and new services for their customers, both residential and business.

Do you see many operators launch their own MVNOs?

This has not really happened in the US after early operator investments and acquisitions of Boost, Virgin and MetroPCS. Tracfone acquired several MVNOs but in the past few years, this has stopped, as well. It remains to be seen how the entry of cable giants like Comcast, Charter and Altice will play out. Some of their carrier deals are strategic in terms of network sharing, but operators are not launching their own MVNOs in the US.

What are the growth areas for wholesalers?

With little growth in new subscribers in the retail market, the growth area today is in IoT, M2M and connected devices. Several MVNOs have also focused more and more on these segments, where they can add value.

Why are you so excited about the growth in IoT/M2M?

With more connected devices in the world than mobile phones (or people, for that matter), the hottest area of disagreement among analysts is whether this fast-growing market will triple or quadruple over the next few years. Mobile operators, who have seen traditional mobile voice and data revenue growth slow to a crawl, see IoT as their biggest growth opportunity, and warmly embrace new players and ideas. They recognize that innovation is coming from all corners of the world. And while unlimited smartphone data consumption is taxing carriers’ ability to keep up with demand, most IoT applications consume relatively small amounts of data and generate more profitable revenue (albeit at lower revenue per device.) Unlike traditional voice and data service offerings, connectivity charges are not the biggest cost element for most IoT plays, so overall economics can be better for IoT providers.

Why are the implications of all of this to the MVNO Space?

Although I developed the first “Full MVNO” model, in 1996, I didn’t coin nor ever liked the term “MVNO” and the way the market is evolving, it is increasingly an unfortunate description of what is really a connectivity business. In the IoT and M2M space, connectivity enables a range of exciting services around connected home, smart devices, connected cars, and machine-to-machine interaction where the value proposition is its utility to consumer or business, with connectivity a relatively small component of value and cost. And the innovation that is going on in this arena has less to do with the connection than it does the service offered, whether it’s tracking assets, monitoring health, managing everything from vending machines to field irrigation, measuring utility consumption, and so on. These services require a connection, at least occasionally if not continually, whilst the amount of data they use varies with the application. With IoT and M2M, carriers welcome new players and work collaboratively with IoT providers. It is a much more harmonious relationship, and one that offers an exciting future of growth and opportunity.

 

Join MVNOs World Congress 2018 in Madrid and hear directly from him on how to move focus away from customer acquisition to customer retention, exploring the multi-player world and how can B2B MVNOs add values to their service offerings.


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