Transforming the market: How technology is creating opportunities for MVNOs

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Freelance Technology Journalist Kate O’Flaherty explores how technologies are creating opportunities for Mobile Virtual Network Operators. AI customer service, 5G and virtualisation are among the key technologies helping to transform the MVNO market

Technologies such as 5G, virtualisation and artificial intelligence (AI) are revolutionising the mobile landscape and overturning operators’ business models. This creates multiple opportunities for MVNOs.

For example, MVNOs that embrace AI-enabled customer service can lower costs and compete more effectively in an increasingly crowded market. And further into the future, when mobile networks are virtualised with 5G, the opportunity is likely to increase even more as a host of new use cases emerge.

The capabilities offered by emerging technologies are set against a backdrop of the consumer move to digital and online means of interaction. According to James Gray director at Graystone Strategy: “Everything is being serviced through digital, and young consumers find this appealing”.

It is already leading to cloud-based services, which Gray says benefit MVNOs by providing the ability to change things quickly and offer new products – such as cloud-based billing. “Also, because people want to interact through digital channels, you know much more about them which, in turn, enables bespoke offerings”.

Meanwhile, because consumers are increasingly keen to sign up with online-only MVNOs, there are opportunities to cut costs further, says Gray. “The challenge for MVNOs has always been distribution and now they can be online only – which also allows cheaper customer service”.

AI customer service

At the same time, the large amounts of data collected by mobile operators and MVNOs is leading to the use of AI-enabled chatbots and virtual agents in customer service. Current offerings can deal with basic queries, with more complex issues directed onto a human agent. Because they take advantage of so-called machine learning capabilities, virtual agents are able to improve over time.

Among their benefits, the assistants offer improved levels of customer service without increasing costs. But they are not intended to replace the call centre: Indeed, the aim of virtual agents is to free up already time-taxed human assistants to handle more complex problems.

One MVNO already enjoying the benefits of AI technology is US based Ultra Mobile: “Since the introduction of our bots, we have been able to provide a higher quality of engagement with our customers when they speak to agents without materially impacting our support spend”, says Sherrie Simmons, COO at Ultra Mobile.

On top of that, she says, the MVNO has doubled the average handling time for its agent to customer calls, increased its net promoter scores by 20 points, and now delivers a first call resolution to customers in 80 per cent of its total human interactions.

In addition to dealing with queries and complaints, AI is being used to engage the customer and offer the right service at the optimum time. According to Mark Sawyer, VP of strategic solution sales at Engage Hub: “Data analytics and machine learning platforms collate, organise and analyse large data sets to help operators in subscriber profiling and analysing offer conversion rates, content usage trends and network activity”. For example, if a subscriber is having issues with billing, they are unlikely to be receptive to marketing messages offering new services, he points out.

5G opportunities

AI is not the only technology poised to shake up the MVNO market. One of the biggest innovations set to benefit MVNOs relates to 5G and the virtualised networks which enable it, Wolter Lemstra, associate professor, Strategy Centre at Nyenrode Business University says: “The big difference between 5G and previous cellular technology is its architecture”.

He explains: “It is virtualised and is like the modern cloud architecture we see in the IT space: It takes advantage of application programming interfaces (APIs) to allow mobile operators to design dedicated services for segments in the market”.

Taking this into account, Lemstra suggests mobile operators that open up APIs could unlock use cases across verticals. He explains: “Today’s MVNOs can take advantage of niche markets but the service they offer is only what the mobile operator can provide. If you give them access to APIs in 5G they can tweak and bundle mobility with IT services and therefore offer more”.

Enabling this capability requires a change to operators’ current protocols. Currently, although APIs are standardised as part of the 3^rd Generation Partnership Project (3GPP) effort, they “aren’t necessarily open”, says Lemstra.

He thinks opening up APIs will benefit both mobile operators and MVNOs: “I think this is a way to create leadership and stimulate the take up of 5G. MVNOs have access to different markets and are able to do lots of specialisation. Mobile operators can never go that deep”.

Indeed, as virtualisation technology within 5G shakes up the market it could allow a host of new use cases fueled by Edge computing – so called because it processes data at the edge of the network. According to Shamik Mishra, AVP technology, innovation team at Aricent: “There are a bunch of revenue streams that operators haven’t monetised”.

He cites the example of augmented reality and virtual reality, saying: “This is a very important use case from an Edge computing perspective because it requires the low latency that we will see in 5G”.

Internet of things and MVNOs

Boosted by 5G and AI, another area set to transform the MVNO market is the billions of devices comprising the internet of things (IoT). “5G, AI and other emerging technologies will have the greatest impact on MVNOs that are focused on addressing IoT opportunities globally”, Mike O’Brien, group vice president, strategy at Syniverse predicts. “Critically, the changes brought about by IoT will create a need for a neutral host environment platform that can enable existing and newer technologies to interoperate”.

Opportunities arising from this include simplified provisioning for network services that will accelerate the deployment of IoT, says O’Brien. After all, he says: “MVNOs cannot simply offer commodity services and compete only on cost”.

A vast array of technologies is already flooding the market – with much more to come –  so MVNOs must ensure they are outlining their strategies now. As Gray says: “Changing technology reduces the cost of entry and cuts the cost of running a business. This gives MVNOs the ability to innovate and get things out quickly, allowing them to be competitive in a challenging market”.

Meet with the key MVNO players from around the world at the MVNOs Series events – including the MVNOs World Congress and MVNOs Europe.