Vodafone wants to turn the MVNO business into an easy gig

Gigs describes itself as a telecom-as-a-service platform that enables any company to offer phone and data plans through its API.

It handles all the heavy lifting: provisioning wholesale network services including voice, text and data; OSS/BSS; branded checkout; payments; analytics; and customer support. It'll also handle tax and compliance.

Vodafone and Gigs insist their partnership will drastically lower the barriers to entry for MVNOs.

"By combining our network with Gigs' operating system we're able to help businesses of all sizes give their customers or employees connectivity quickly and efficiently," said Maria Grazia Pecorari, director of wholesale and strategy at Vodafone UK. "At Vodafone UK, we are committed to fostering innovation and supporting our customers' evolving needs, that includes giving more people access to our network, more flexibly."

US-based Gigs came out of hiding in 2022, when it announced the successful completion of a $20 million funding round led by Google's early-stage fund, Gradient, plus a host of venture capitalists. The CEOs of Uber, DoorDash and Instacart also all took part. Former AT&T Mobility CEO Glenn Lurie joined as an adviser this May.

Since its launch, several brands have rolled out MVNO services via Gigs. They include alternative smartphone OS maker Murena, online bank Nubank, and investment services provider Wealthsimple, among others.

"We stand on the brink of a transformative shift in the telecommunications industry. A surging number of tech companies – from neobanks, travel companies to HR platforms – are launching unique product experiences with tailored phone plans to meet the demands of modern consumers and businesses," said Hermann Frank, co-founder and CEO of Gigs.

"Our strategic partnership with Vodafone is a win-win-win for all involved. Vodafone extends its network reach to innovative tech companies with large audiences and digital distribution channels, while driving significant mobile traffic to the Gigs platform. Our customers, meanwhile, can now seamlessly bundle their existing offerings with phone plans in their own brand on Vodafone's premium 5G network."

Gigs says budding MVNOs can use the platform to configure service plans and how much they want to charge. They have the option of integrating Gigs' connectivity service into their own app via an API, or they can use its hosted checkout service, Gigs Connect.

Once enabled, end users can sign up, pay and activate their eSIM and manage their service all from one portal, while MVNOs can keep tabs on subscribers, payments, customer support queries, and analytics all from a single dashboard.

What the press release doesn't talk about is the revenue model. Presumably Gigs gets a slice of the action for every MVNO that signs up to its platform, while Vodafone as the host network charges Gigs wholesale access fees for all the various bundles of voice, text and data that are required.

All sounds straightforward enough, but the MVNO market is tricky to navigate at the best of times.

In the UK, MVNOs like GiffGaff, iD Mobile, or Tesco Mobile compete with MNOs – and each other – by targeting bargain hunters looking for cheap deals and flexibility, while others go after a particular segment – Lyca and Lebara are popular with ex-pats who tend to make a lot of international calls, for example.

Irrespective of the target demographic, the margins are tight – especially in competitive markets like the UK. This in turn exerts similar pressure on companies like Gigs, which needs to offer value over and above what an MNO can provide.

On top of that, the MVNE market is itself a competitive market. In March, billing services provider Lifecycle Software joined the fray, launching its Nexus MVNE platform.

It's a tall order, but if companies like Gigs can unlock a whole new category of MVNO, then it might just be onto a winner.