How can MVNOs secure their place in digital value ecosystems?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Thandi Demanet, Business Analyst at TMForum, explores the digital value ecosystems and how MVNOs can have a bright and strong future role in this emerging economic paradigm.

The business of IoT is rapidly growing, and despite a certain level of maturity, it’s not getting any simpler. As the speed of evolution and development continues, stakes too continue to rise. From the days of M2M we’ve seen a lot of change, a lot of innovation and countless opportunities have arisen as technology has become more sophisticated to enable IoT. It hasn’t stopped at that though, as IoT is expanding into IoE (the Internet of Everything, connecting people, processes and things to derive intelligent actions and optimize a variety of fields) and now into intricate digital value ecosystems. This new economic and commercial paradigm is radically different from anything companies have known for centuries so it’s only natural that it takes some time to find one’s footing – but time is not a luxury businesses can afford today, at the risk of being ousted, becoming irrelevant, or to use a term irrefutably associated with digital – disrupted.

What strategic capabilities and advantages can MVNOs leverage?

Luckily, MVNOs intrinsically possess capabilities that are valuable in this new ecosystem era and it’s important to take stock and take advantage of these to generate new revenues, to provide new services, to occupy new positions in various sectors. While providing connectivity over which to run complex digital services may seem the obvious role for a communications service provider, the MVNO can and should also leverage other capabilities and strengths it has including looking at agility and its current customer base. IoT and value ecosystems comprise a complex value stack consisting in connectivity, of course, but also, device management, data gathering and processing, security and privacy assurance, charging, billing and settlement, customer experience management, digital platform provision and management, APIs, OTT applications, etc. Some of which MVNOs are well placed to offer depending on the existing business model, size, expertise and customer base. Many innovative MVNOs are already looking at designing and adopting new business models and actively seeking innovative partners to develop new services and commercial opportunities.

In this previous article, TMForum’s Senior Director for IoE and Digital Business, Craig Bachmann alludes to the MVNO’s expertise in catering to niche markets. As the IoE expands, more and more use cases are emerging, each with its own particularities, and tailor-made, agile solutions will be what users value. In a recent report, Analysys Mason warned of the threat MVNOs pose to MNOs in IoT citing as an example recent MVNO contract wins with Audi, GM and Kia Motors in the automotive space. It’s becoming increasingly evident that with specialised MVNOs becoming more widespread, the customer relationship based on established trust goes a long way towards developing new services with and for them and generating new revenue streams. The game, or business rather, will be won by those able to forge a solid partnership with customers through expert understanding of their objectives and genuinely enhancing their business.

What do digital ecosystem-based business stakeholders need to succeed sustainably?

What most companies don’t have unfortunately, is a holistic view of a given business scenario, meaning it cannot fully grasp the “end-to-end” requirements and value. This is true for all potential ecosystem participants likely to provide some part of the value chain (or fabric rather in this interconnected, interdependent context).Yet, without understanding the needs and strengths of your partners, as well as their objectives and overall business models, any ecosystem is destined to, at some point, encounter incompatibilities and difficulties, or worse, simply fall apart. When an end-user is relying on a service delivered though this ecosystem, he or she doesn’t care much about how or why the expected result, what they value, is no longer there. At best, it will be a commercial hindrance; at worst, lives and livelihoods will be impacted, depending on the sector and service. In other words, it’s vital,for a digital service delivered though an ecosystem of partners, what we refer to as value ecosystems, to be built on common understanding and a common vision, with compatible, sustainable business models throughout.

This is the concept behind an Ecosystem Business Architecture (EBA), which TM Forum is building with member companies through open collaboration. The Forum has been the global non-profit industry group helping organisations navigate digital transformation, improve agility and develop the assets and capabilities needed to remain competitive and thrive over the tumultuous changes of the past 28 years, and continues to do so via neutral industry-wide collaboration. Examining and mapping ecosystem roles, relationships, responsibilities, capabilities, value chains and fabrics, identifying potential weak spots, establishing a common language for ecosystem partners, identifying and defining ecosystem-level metrics and building a common reference architecture for effective, efficient and sustainable ecosystem-based digital business are the purpose of the EBA. Through addressing a series of real-life business scenarios, we will identify among the entire spectre of stakeholders, commonalities to provide guidelines, practical tools and assets to facilitate and optimise monetization and management, while generating solid trust.

The tip of the value ecosystem ice berg

While it’s become apparent that the commercial and organisational aspects are the least developed and most complicated when it comes to digital, connected business, the underlying, enabling technology is of course, a crucial part of IoT and value ecosystems. So, we continue to examine and explore the use of innovative technology solutions such as distributed ledger technology (DLT), automation, AI and machine learning. Indeed, these innovations open up new opportunities and potential revenue sources for MVNO players seeking to provide more than connectivity. The imminent launch of 5G too will bring new opportunities, challenges and business cases that will be better evaluated and mastered with the support of an ecosystem business architecture.

An ecosystem business architecture will allow MVNOs and other business stakeholders to visualise and examine the value ecosystem associated with a given business scenario and better inform their strategic decisions. It will make value ecosystems simpler and safer business undertakings.
We’re only at the tip of the ice berg when it comes to value ecosystems and we’re already seeing ecosystems of ecosystems appear. MVNOs can have a bright and strong future role in this emerging economic paradigm, but the time to prepare and take action is now, or better yet, yesterday!

Thandi Demanet is the business analyst for TM Forum’s IoE & Digital Ecosystem program, working closely with members, including the world’s leading Communications Service Providers and technology providers. Thandi helps design and supports implementation of the Forum’s collaborative work in these areas, both strategically and tactically. Her role is to identify the most pressing and valuable opportunities and challenges within the connected economy, as well as to ensure effective and efficient open collaboration between industry leaders on a global level to facilitate commercial success for all. Thandi is passionate about the power and promise of the IoT and innovative emerging technologies to improve lives, societies and the world we live in.
Hear from Thandi Demanet at the MVNOs North America 2018. Thandi will be taking part on the ‘TM Forum Workshop: Focusing on IoT stack and where MVNOs can play’.