…Tasks license operators on rural connectivity
As Nigeria continues to gear towards the licensing of Mobile Virtual Network Operation, a Mobile Network Infrastructure Provider expert, Mr. Satya Mekala has disclosed ways and techniques that can be adopted for a successful operation of the virtual network in the country.
While applauding the Nigerian Communications Commission (NCC) for announcing the licensing of MVNOs in the country, the Managing Director, Wireless Technology Labs, Satya Mekala said the definition of business aims, focus, analysis, planning and commitment from management to make the MVNO work are fundamental.
Mekala made this disclosure at the Business Remarks Telecom Sector Sustainability Forum (TSSF) held in Lagos with the theme “Creating Awareness and Ensuring Sustainability of Mobile Virtual Network Operators (MVNOs) in Nigeria’s 5G Ecosystem”.
As per the report by Fortune Business Insights, He said the global MVNO Market Size is projected to reach USD 67.54 billion in 2020 and USD 123.40 billion in 2028, at a CAGR of 7.9% during the forecast period, 2021-2028.
Speaking under the sub-topic, “How to build a successful MVNO business in Nigeria”, Mekala posited that the success of an MVNO is heavily dependent on choosing the right strategy to acquire sufficient subscribers.
To choose the right market segment to acquire a lot of subscribers quickly, the acquisition strategy must be well designed as this is one of the highest costs for an MVNO. Mekala also stated that it is about the means available to access the service offering as MVNOs offering data services only may want to subsidize smartphones. “This can create huge debt in the beginning,” he highlighted.
While advising potential operators on choosing the right offerings wisely, he emphasized the need for operators to differentiate their offerings so that customers can see the benefits to take your service. According to him, MVNO is a volume business. More subscribers mean more revenue.
“Initially customers will come to you to get better pricing. The transparent and easy-to-understand pricing structure is important.”
Sharing more insights, he said the barrier to starting an MVNO is very low, and many fail to establish a sustainable business model. Worldwide, only 20% of the conceived MVNOs survive. However, Mekala noted that effective voice and data bundles are key to customer acquisition. Bundling VAS services can help MVNOs to acquire a particular group of customers (mobile banking, online gaming etc). Also, Specialized MVNO which sells only IOT SIMS on 4G / 5G networks is very interesting.
According to him, it is important to assure that the economics of telecom are well understood and that the business plan is built up accordingly. What is the end game of an MVNO? What is the exit strategy?
Speaking further, he said forging a win-win agreement with a Mobile Network Operator (MNO) will play a key part in any MVNO’s success.
“The secret is having solid partnerships with the host operator and other partners. Having an experienced technical partner as well as a vendor is crucial. A good contract with a network operator that is easy to renegotiate if it becomes necessary to switch network hosts is essential. Ensure that the final contract is adaptable enough to meet new requirements, such as the need to accommodate data IoT offerings, and future opportunities with upcoming 5G networks” he said.
Furthermore, Mekala advised MVNOs to include a rural connectivity strategy in their plan. While highlighting that over 45 million Nigerians are without connectivity, building rural networks MVNO can acquire a captive customer base that will make the company stable and achieve a faster return on Investment (ROI).
On her part in her welcome address, the Convener, Bukola Olanrewaju who also doubles as the Managing Editor of Business Remarks said the increasing number of mobile subscribers, technological advancements, and demand for connectivity has played an important role in creating a significant opportunity for MVNOs to thrive in the sector.
“By 2020, some estimates put the total number of MVNO subscribers on the continent at upwards of 110 million – not far off four times the total number in the USA.
“The introduction of Mobile Virtual Network Operators (MVNOs) is believed to add value for both operators and customers; for the operators by using their available excess capacity and for the customers by offering innovative and several niche value-added services that were not offered by Mobile Network Operators (MNOs).
“From the consumer side, MVNOs can provide more competitive offerings, which means lower costs without compromising on service. Utilizing network capacity without having to own it frees up costs that are then passed down to the consumer,” she said.