Thursday, 28 December 2006

MVNO for success or failure ?

MVNO stands for mobile virtual network operator.
Currently, according to some estimates, there are about 230 MVNOs in the world.
Some of them are success, but some of them are failure.

The main characteristics of such an operator are:
- does not own licences frequency spectrum ,
- resells wireless/mobile phone services ( phones, calls, ''stuff'') ,
- strong brand,
- utilisation of the network of other mobile operator ( owned by big corporate groups and major telecom players in the country )

Speaking about success, Virgin Mobile is considered success and speaking about failures , ESPN Mobile and easyMobile could be mentioned as a flop.

According to some research I read , successful MVNOs do these things:
- Distribution – shelf space and access to audience
- Churn/loyalty programs – new phones every xy months, goodies, minutes
- Technology aligment with ''host'' operator – roadmap to future compatible products

Other things successful MVNOs do:
- management gets ''wireless'' tech,
- target segment is wisely choosed,
- asset-light investment strategy,
- win-win contracts
- understand content and wireless economics
- they are different
- keep things simle

MVNOs are ventures with great focus. They are either ''discount'' or ''lifestyle'' operators.
Virgin Mobile is discount MVNO, and Helio and Amp d' Mobile are lifestyle MVNO.

When I first taught about MVNOs back when they were first grabbing headlines ( in 2005 ) , there was allways question poppping in my mind about motivations of major mobile operators to lease their networks .
They were competitors indeed, but it has logical calculation.

Main motivations for T-Mobile, Vodafone or Verizon Wireless are these three and explain everything:
- Segmentation-Driven Strategies –it can help them attack specific, targeted segments.
- Network Utilisation-Driven Strategies – it can help them create economies of scale for better network utilisation.
- Product-Driven Strategies – specialised service requirements and get to customer niches that mobile operators cannot get to.

MVNOs have operational cost much lower but must invest very wisely into marketing.
It's a myth that MVNOs appeal only to consumer segment. Wireless Maingate is a company that targets enterprise customers.

At the first glance and with little opservation of MVNOs web sites, there could be reached easy conclusion on how they present their offer to potential customers which is their modus operandi and purpose of existence ( better business model in the end ) :

- offer shiny/new/fresh/exciting branded phones ( better cool phones ) ,
- simple plans ( prepaid dominates, post-paid is by minute and tailored to usage ) ,
- cheap talk ( is cool ) ,
- added value that appeals to targeted demographics – music, social network, multimedia ( you, that's cool ) ,
- superior customer service and loyalty ( cool ! )
- granular distribution deals with shopping chains and local stores ( for kits and prepaid minutes)

It's not all that shiny for them, though. Profitability is hard to achive. Management must be smart and explore every opportunity, scale their business, maintain good partnership deals and retain creative marketing people and must make plans for evolution into possible new products and services ( sometimes it is paradox, but what gives ).

As of December 2006, in Croatia are operating two MVNOs: Tele2 which is using Vipnet infrastructure, and the other is Tomato , which is Vipnet's branded MVNO for simple wireless services.

But let's go back to business model. These MVNO sharks are fast to the market, know their customers and are highly focused, but most of them will have to evolve into something convergent and triple-play ( laugh ) – I meant data and messaging ( paradox ).
Yet, I am skeptical for much of this risky business and I will watch this space more closely over the upcoming years.

You know , I heard somewhere on the net Apple will try next year become MVNO ( US only ) which is not so smart move if he does try, IMHO.
Europeans won't give up their Nokias or Motorolas in favour of
Apple phone , I think.

( still to do outside linking later on )

Wednesday, 27 December 2006

Switch to ''new'' Blogger

I moved my blogger account to ''new'' Finally !
Now, I can login with my Google account .
How shall I call this action ? Unified Google experience ;)

Dollar Outlook 2007

WestLB, a German bank , gave prediction for the state of global economy in 2007.
Some portions of report are of interest to me.
I consider WestLB as higly reliable source for economic data.
What caught my eye in this report is -->

Falling real estate prices in US...:

In the US, falling real estate prices are restricting the amount of money available for consumption, which is slowing GDP growth. Even if we only see limited risks of a recession on the other side of the Atlantic, this is likely to bring about a turnaround in US monetary policy.

German economy should be OK:

German companies' improved competitiveness is likely to tone down the negative effects on exports and investments arising from the slowdown in global economic growth.

Fed to cut rates sometime in May 2007 :

we expect the Fed to start cutting its rates in May 2007 due to a less promising growth outlook and an improving inflation prospects. We expect to see three small rate cuts by the summer, which will bring the Federal Funds Rate down to 4.50%.

ECB moves rates up in 2007.:

As far as the ECB is concerned, we are reckoning on a further rate hike to 3.5%, a neutral interest rate level, in December. There are many indications that this will not be the end of the rate hikes.

Which will bring us to:

Differing regional growth patterns are likely to lead to divergent monetary policy trends.

US dollar to be in 2007.:

Indeed, we believe the US dollar will lose further ground in the face of the reducing growth and interest rate differential. However, it should be remembered that slower growth in consumer spending tends to tone down another factor weighing on the Greenback; i.e., the still-high current account deficit. As a result, we do not believe the dollar will veritably tumble in value, but instead feel it will settle down at around 1.35 $/€. However, the possibility of it reaching 1.40 cannot be ruled out.

That's all I wanted to know. The fate of US dollar in 2007.

Tuesday, 26 December 2006

Firefox chaos list

In a spirit of previouse post, just to bookmark few things about communication agency Denuo Group. Found that via my firefox ''chaos'' list. It's a list where I put all my web links I don't know what to do with them, but I have a feeling I'll be interested to explore sometimes later.
Acctually, I will bookmark only web link. You can't do copy paste action and quote from their site cause it's made with Flash.
Instead, I'll highlight something from an interview with Denuo's Nick Pahade:

Our Ventures component is clearly unique because it allows us to align with the media owners of tomorrow-- those who are shaping the touchpoints of the future. We can help bring those media to life and generate first mover opportunities for our clients in the process.

We are also an incubator of new thinking and skill sets. Don't get me wrong, there are plenty of great digital shops out there, but that's not really our remit.

That's what I like. Fresh and ''renewable'' thinking.

Why are you doing it again ?

Why publishing online again ?
To clarify my mind, connect with other people, learn, bookmark ideas, remember places on the Web, test ideas and publish my words.
I have still something to say, and I don't mind if nobody's reading. I get used to this all these years.

Quick reminder

For those of you just introduced to this blog, I am back after 9 months.
I began publishing with Blogger in early 2002.
First, it was written in croatian and now it's in english.

It was personal diary at first, and later on I began writing more about World Wide Web services, apps and products, about media and business, Croatia etc.
Just to remind myself with an old quote why I made a switch to english:
I am starting to write this blog in english. The desicion starts as of today.
Not sure yet whether it'll be pure english -worded blog or coctail regarding blog language. Croatish, somehow :))
Obviously, it depends a lot on my mood and inspiration. Yes, and time !
There are few reason for this sudden change.
First, my english skills aren't as good , and blog writing could be incentive for learning .
Second, it's about challenge ,too.

I'm back !

Testing, testing... ;)
I'm publishing again. Now, that's something.
Weird, I was on hiatus for months. I was busy. So, now back to publishing.
Is there anyone out there ?