Being Niche, Being Fast, Being Profitable – MVNO's Best Investment is Probably a Solid End-to-End Convergent Billing Solution

This year alone, thousands of agreements were signed between Mobile Operators and leading companies in a variety of digital content services, m-commerce, mobile payments, mobile advertisement, cloud services and the Internet-of-Things(IoT), as Operators compete to bring to market the widest portfolio of service offerings. While sound investment principles would have called for a lot of thinking and planning before new services are rolled out, Mobile Operators simply cannot afford the luxury or the time of doing so. The increasing price pressures and threat from competitors have compelled more Operators to do away with traditional wisdom and instead, focus on how fast they can introduce newer and more enticing service packages in the marketplace.   

And why not? Without the ability to quickly package new services, VoLTE being an example, Operators will be losing out on the early mover advantage that helps them acquire new customers more rapidly and which provides the lead time for Operators to beef up their new service to reach a desired level of performance which assists in retaining these and newer customers and boost their revenues over time. 

In the case of Mobile Virtual Network Operators (MVNOs), the ability to roll out new plans and packages that are able to compete with those provided by larger Mobile Network Operators (MNOs) and other MVNOs is an overriding factor in determining their market competitiveness and ultimately, their profit numbers. The fact that MVNOs have neither an infrastructure nor a network to be managed means that their business and operational focus will be fixated on service innovation and how fast these innovations can be translated into actual offering to the customer.  

Apart from innovating their service offering, the infrastructure-free setup allows MVNOs to pay a lot of attention to their branding, marketing and sales strategies, in their bid to retain their market share via service differentiation, leveraging unique selling points and their existing assets, both tangible and intangible, such as a widespread physical presence as in the case of retail stores or fuel stations; or a huge clientele as in the case of an airlines or utilities company.

Infographics

Bundling the right services and creating plans that suit the needs of customers involves MVNOs taking risk in introducing newer features, newer pricing models and newer content choices, betting on what is most likely to strike a chord with the tastes of today’s mobile consumers. Without such bold moves, players will face the challenge of operating and sustaining profits in an industry that is characterized by increasing commoditization and almost zero product differentiation, which will inadvertently lead to what economists would say, normal profits – and what the market will say, dismal returns - in the long run.

The need to escape the threat of commoditization has led to MNOs creating service differentiation through coverage and network performance improvements, leading to claims of having the broadest coverage and highest speeds, as well as via extension of their portfolio of services to cover every conceivable idea, as remote as the idea might be in relation to MNOs' traditional connectivity business. Today, MNOs are providing, among others, services such as in-stadium live broadcasting (enabled by LTE Multicast), home security solutions comprising alarms and cameras, apps such 'Downtime App' that allow customers to create a virtual downtime for themselves and are even selling digital stickers over own-branded chat applications and have topped up their range of hardware offers to cover M2M end-node modules which can be installed on electrical appliances to create smarter gadgets, all of which are seeing MNOs going on a partnership spree with various content brands, ecommerce players, application providers, hardware makers and a whole range of software and cloud service providers.

For MVNOs though, differentiation hinges very much on how niche and targeted their service plans are and more importantly, how adaptive these plans are to the fast changing needs of their customers. Many MVNOs will say that their billing capabilities play a critical role in determining how fast their service plans can adapt to changes in the marketplace, such as the emergence of VoLTE, because such capabilities will help MVNOs price these new services, bundle them with the existing services, create new plans overnight and account and bill for user consumption accurately, and in real-time.

With the emphasis on real-time management of plans and the trend towards self-service via the web interface, billing becomes a central element to MVNOs’ business, in enabling service innovation as well as in managing subscribers and their service experience. It enables MVNOs to roll out plans based on billing rules, such as credit limited plans or daily consumption quota(in $$). By combining billing with policy control which enforces service controls on data usage on the network end, covering any service rendered on data connection, including VoLTE and Mobile TV services, MVNOs are able to extend their services to cover even more features such as throttling down of speeds once a certain usage quota(bytes) is reached, controlling the amount of data used on a particular service or site, providing free access to online content and assigning usage quotas for multiple accounts within a shared plan.

Towards this end, convergent billing, a solution that enables different telco services to be managed and billed in a single account, and which allows functions such as charging, mediation and rating to be rolled into a single solution, will become a critical component for MVNOs looking to tie together all their service offerings – voice, SMS, data, roaming, VoLTE, VoWiFi, MobileTV, Mobile Music, Mobile Money, Sponsored Data, etc - in a single plan, in a single bill and managed using a single web interface while ensuring that up-to-the-second usage details are accounted and billed for accurately and continuously.  

What is more, with the rapid growth within the IoT space, the number of services that a converged billing platform will be managing in future will only grow bigger – the Connected Car, the Connected Home and Smart Wearables for example will elongate the list of services that will be converged under a single account and on a single bill as MVNOs move to power more than just smartphones and tablets to cover the whole range of appliances and machines used daily by their subscribers.

An end-to-end converged solution, comprising billing, charging, mediation, rating and policy control will hence shape the strength of MVNOs in facing up to the challenges in the marketplace as newer breed of Operators with inherent strengths in points of presence and customer reach start to debut their own brands of telecom services. The key is continuous innovation and responsiveness to market needs. Leveraging the best, and more importantly, flexible and scalable solutions in the marketplace either directly or via Mobile Virtual Network Enablers and Mobile Virutal Netwok Aggregators will enable MVNOs to rapidly improve their time-to-market, tailor more targeted services and improve the overall efficiency and profitability of their businesses.


How does Convergent Billing work? Snapshot from a recently covered solution -

Founder and CEO at The Fast Mode | NFV/MANO/Openstack | Telecoms Service Innovations & Monetization | Speaker, Moderator and Analyst

Prushothma brings more than 22 years of experience in designing and delivering some of the most advanced service innovations in the Telecoms industry.

Follow him on Twitter @prushothma, LinkedIn @prushothma

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