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Identifying Niche Markets Among Keys to MVNO Success

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May 21, 2014

Identifying Niche Markets Among Keys to MVNO Success

By Rachel Ramsey, Content Director

Mobile virtual network operators (MVNOs) account for more than 10 percent of mobile users – they’re the Boost Mobiles, Virgin Mobiles and TracFones of the mobile industry, offering innovative services to end-users on top of a wireless operator’s network. This article is the first in a series that will explore what it takes to be a successful MVNO today, diving deep into five key areas for MVNO success.

An MVNO is a company that sells telecom services under a private label brand and maintains the customer ownership. It uses another operator’s radio spectrum to deliver those services, but it owns the customer relationship, the promotion of the service, pricing and regulatory and legal responsibilities.

As with almost any business, in order to be successful, MVNOs need to focus on the customer; knowing who they are and what appeals to them. Established brands need to understand why their customers are loyal to them and then determine if that loyalty can translate into a mobile proposition. Your brand value proposition, whether around quality, price or variety, needs to be able to translate into a mobile service for your customers. 

New MVNOs need to define what they want to stand for and then build their brand around this definition. There are many successful US MVNOs that focus on a target audience based upon cultural ties, causes, social norms or connected experiences.

In a whitepaper, “Changing Landscapes: The MVNO Opportunity,” Sprint (News - Alert) explores the explosion of mobile users globally and how that ties in with the growth of the MVNO market. It also offers insight on how MVNOs can take advantage of the opportunities in the evolving mobile market, and the critical success factors for MVNOs. The first key to MVNO success is identifying niche markets.

Addressing market segments that larger carrier competitors leave untapped is a big opportunity for MVNOs to be successful. Whether it is ethnic groups, retailers, financial products, data-only connectivity, M2M services or no-contract offerings, MVNOs can succeed by matching innovative products with receptive customers. Targeting can also be done by affinity, such as alumni associations, professional memberships or political beliefs, or demographic, such as age or ethnicity.

One company was inspired by the changing behavior of the American wireless consumer. It was convinced that customers would increasingly be comfortable purchasing wireless service from mass merchants and grocery retailers, particularly as price compression set in and the market matured. The results? It saw a record year, both in terms of subscriber and revenue growth.

Because MVNOs do not own networks or infrastructure, they can focus on offering value-added services to targeted markets. Customers benefit from these services while at the same time experiencing no noticeable change in network performance. MVNOs that can differentiate themselves by targeting specific markets and serving customers’ needs area on the right track to success – stay tuned for the next key steps in reaching MVNO success. 

Edited by Alisen Downey

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