How a new breed of MVNOs is disrupting telecoms

The era of digital natives has begun, pushing expectations around mobile services to new heights. Data use has skyrocketed, and consumers want diverse digital experiences that offer value, quality and convenience above all else. The new breed of mobile virtual network operators (MVNOs) now cater to this need and are disrupting the telecoms industry with targeted, personalized services that go above and beyond traditional service offerings.

The pace of innovation in this space is only going to continue. The MVNO market is valued at just over $70 billion USD and is expected to reach $147 billion by 2032. This torrent of new service offerings isn’t just about offering cheaper prices — it’s about providing contemporary experiences that subscribers have come to expect as standard.

The telco industry is ripe for disruption, and MVNOs are perfectly positioned to take on the role of disrupter. As wireless communication service providers (CSPs), they do not own the wireless network infrastructure over which they provide service to their customers. Instead, they enter a business agreement with traditional mobile network operators to obtain bulk access to network services at wholesale rates, then set retail prices independently. This gives them the freedom to focus on customer experience without the need to fret over infrastructure complexity. Examples of MVNOs include Boost Mobile and Cricket Wireless in the United States, giffgaff in the United Kingdom and Aldi Mobile in Australia. These companies have made a name for themselves by offering competitive pricing and innovative services that cater to specific market segments.

Say hello to the MVNE

The rise of cloud-native MVNO-enabling, mobile virtual network enabler (MVNE), platforms has opened the door for non-telecom brands to launch services swiftly, sometimes in as little as 90 days. This rapid speed-to-market and revenue generation has attracted diverse businesses, from retail chains to e-commerce giants and utility companies.

While this trend may still be new in the U.S., it's already progressed in other countries. For instance, Guinea Mobile in Peru has created an experience that matches and even exceeds the expectations of the digital generation. It can onboard new customers in minutes, a stark contrast to the months-long process of legacy operators. By leveraging a software-based business support system (BSS), Guinea Mobile can onboard new customers digitally in just four touches, including contactless subscriber verification using fingerprint technology. Traditional telecom players do not offer this pace of onboarding, but that might change as experiences like the one Guinea Mobile offers become standard.

The power of bundled experiences

This wave of consumer-focused MVNOs redefines the notion of a “good deal.” It’s no longer a race to the bottom in terms of price but about removing friction from the onboarding process and packaging products and services to appeal to millions of subscribers.

For instance, companies like Nova Energy in New Zealand offer mobile services bundled with utility services, providing a unified billing experience. Salam Mobile in Saudi Arabia prioritizes personalized packages to meet individual customer needs, resulting in a higher average revenue per user (ARPU). It is a win-win for MVNOs and their customers — operators get a larger slice of the pie by bundling services together, and subscribers benefit from less friction and overall reduced costs. The more personalized and attractive the bundle of services, the more appealing it will be to users who might otherwise have to go through several steps to acquire the same services from separate vendors.

Something pivotal has changed in recent years to facilitate this boom in personalized offerings, and it started with the introduction of software-based BSS platforms.

Breaking the shackles of legacy systems

Historically, MVNOs didn't just "rent connectivity" from the underlying network provided by the operator but also relied on the operator's legacy BSS. In reality, what seemed like a logical step shackled MVNOs because capabilities baked into legacy BSS platforms limited them. These archaic, complex systems weren’t designed to facilitate the rapid launch of new offerings.

New MVNOs are choosing to rent the network but implement their own software-based BSS platform to combat this. It allows them to tap into the speed, agility and contemporary digital experience that cloud-native technologies can provide. More importantly, it makes it easier to launch services and set up subscriber billing for bundled services in a language that consumers understand — convenience.

Traditional telco players are now looking at MVNOs and feeling the heat. They recognize their legacy BSS structures as a critical obstacle to digital transformation. This will eventually result in a massive pivot toward modernized, software-based BSS structures that are flexible and scalable. However, the difference between smaller MVNOs and “big telcos” is that MVNOs have the agility and speed to immediately seize the benefits of modern BSS structures.

Changing market conditions

Software-based BSS platforms offer numerous benefits crucial to modern MVNOs' success. As we’ve alluded, they provide agility, allowing MVNOs to quickly adapt to changing market conditions and customer demands. They also facilitate easy integration of third-party services, enabling MVNOs to offer a broader range of services and create unique bundles that appeal to different customer segments.

Crucially, software-based BSS platforms streamline the charging and billing processes and make it possible to launch services quickly. They also support automated operations, reducing the need for manual intervention, thereby lowering operational costs. Interoperability is another factor — a software-based BSS system can integrate seamlessly with operational support systems (OSS) and customer relationship management (CRM) platforms to reduce friction and improve customer service levels.

Perhaps most importantly, these platforms support a superior customer experience. They enable MVNOs to offer digital self-service options and allow customers to choose and change rate plans at their convenience. This level of control and personalization dramatically enhances customer satisfaction and loyalty, increasing retention while providing endless opportunities for further monetization.

What’s next?

The MVNO market is expanding, with significant growth observed in the U.S. and Europe. However, some of the most innovative MVNOs are in Asia, particularly Japan, Vietnam, Singapore, Australia and New Zealand. These innovative MVNOs have differentiated by leveraging new cloud technologies to provide unique service bundles, personalized customer experiences and targeted packages that resonate with subscribers.

However, while cloud adoption is increasing, not all MVNOs have transitioned. Legacy BSS platforms have hindered their growth and potential to secure new revenue streams. It is crucial for MVNOs to invest in their own cloud-based BSS infrastructure and prioritize a simple, unified path to customer experience and monetization.

In today's highly competitive telecoms marketplace, the journey to unified customer experience and monetization cannot come soon enough. The disruption has begun, and the new breed of MVNOs is leading the charge. They are personalized, digital and powered by the cloud.

Joy King, head of Optiva’s GTM strategy. Prior to Optiva, Joy led Product & GTM Strategy, including Product Management & Marketing, for Vertica, a high-performance unified analytics platform leveraged by the telecom industry. Before Vertica, Joy led telecom industry marketing for HP and HPE for over a decade. Her experience has created a passion for what’s possible, and she’s determined to make it happen.

Salman Tariq, Optiva’s VP for Europe, Middle East and Africa. Salman has over 20+ years of telecoms experiences. Salman has extensive experience focused on telco OSS/BSS solutions, cloud native technologies and public cloud led transformations. Prior to Optiva, Salman worked at Redknee and Nokia Siemens Networks.