The 5G-enabled B2B opportunity for MVNOs

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Stephen Randall, CTO, MDS Global talks about the 5G-enabled B2B opportunity for MVNOs.

Think MVNO and you largely think of the consumer market. The sector is also characterised by innovative pricing and a nimble approach that traditional operators find difficult to match. However, as the mobile market evolves with the advent of 5G networks, could those same MVNO characteristics be more profitably focussed on the B2B market? Stephen Randall, Chief Technology Officer at MDS Global, thinks they can.

MVNOs should hit the 5G B2B trail

Most MVNOs exclusively target the consumer market, and the holy grail of market share. Without the overheads and challenges of running the physical network, MVNOs can focus fully on the consumer appeal, and pricing, of its services.

However, the consumer MVNO market has become very crowded, and is also incredibly price competitive, meaning profit margins are diminishing. It’s also difficult to build any long-term customer relationships in a market with virtually no barriers to switch providers, and plenty of competitors providing incentives to churn.

But the nimble nature of MVNOs means that there are aspects of their business model that are also suited to developing the specialist B2B services that 5G networks are expected to unlock. MVNOs have the ability to personalise offers and run bespoke, high value services to meet individual customer requirements.

The analysts at Research and Markets estimate that the MVNO B2B 5G market is set to be worth $3.1bn by 2026 – that’s 40 per cent of the entire MVNO 5G market. Furthermore, they say that IoT networks and purpose-specific B2B MVNOs will drive this take-up and witness substantial growth during the next five years.

They are not alone in this assessment. Omdia’s principal analyst Dario Talmesio believes the Internet of Things market is even more suited to the MVNO model than the consumer market because the hundreds of sub-segments, in hundreds of markets, will need specialists to address the multitude of business cases that will emerge.

Analysts are united in their view that the sheer variety of these requirements will drive a service-led B2B market with technologies such as AI and machine learning to the fore. MVNOs are much better suited to meet this demand than traditional MNOs – they are nimbler, can create and turn on specialist services quickly, and offer both a faster time to market and a quicker return on investment.

As well as specialist services, there are specialist markets. In addressing these markets MVNOs should opt to look beyond simple connectivity. They can also wrap other services around the basic offer, such as device management and third-party billing. For example, customised service plans could accommodate the option to bill third parties for services that are outside of the standard arrangement, with the MVNO handling the settlement of charges as part of its billing and payment processes. This, of course, would require a digital BSS solution that is able to cope with the complexity of the settlement process.

Another means of differentiation would be to specialise in B2B 5G use cases that go beyond the promise of high-speed connectivity. While the consumer appeal of 5G is all about speed, the B2B appeal might be more about ultra-reliable low latency connectivity (URLLC).

However, the sheer range of service types and service requirements that 5G could create across a multitude of industries and sectors means MVNOs cannot hope to be experts across all the potential fields.

The B2B2X market will therefore require MVNOs to gain a much deeper understanding of the markets and industries they are addressing. They will need to adapt their offers according to the way the customers operate, and they should not look to do this alone. We believe MVNOs will require much deeper partnerships with specialists to understand the market and promote the benefits that 5G can deliver.

As a result, we see the emergence of business curators – stakeholders within these markets with a deep understanding of the industry who can help MVNOs create solutions that will have immediate appeal.

In our view, MVNOs that determine the market sectors to address, that partner with the right ‘business curator’, and have access to digital BSS to speed new service or product launches, will be able to find a short-cut to service delivery and market success. Working with a business curator – say in fleet management – would enable an MVNO to build exactly the right solution for that market and include sector-specific levels of service reliability and assurance.

Our VNOnDemand solution gives MVNOs access to a parallel billing solution ideal to support these new service launches. Delivered using the “as-a-Service” model that is common in cloud and software markets, it can help MVNOs quickly build and implement specialist tariffs and services for new operations without compromising current business systems.

The B2B customer base traditionally lags behind the consumer market when it comes to the take-up of new technology. This means that the ability to be first to market and quickest to launch new services offers MVNOs a tremendous opportunity to take advantage of the emerging 5G B2B market.

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