Mobile virtual network operators (MVNOs) are redefining market dynamics in telecommunications. As entities that lease network capacity from mobile network operators (MNOs) and sell it under their own brand, MVNOs have carved out an expanding niche in the industry, offering tailored services to diverse customer segments.
One of the main drivers of MVNOs’ success is their ability to leverage emerging technologies and trends—such as 5G, eSIM, the Internet of Things (IoT) and AI—to offer differentiated and value-added services. But despite their potential, MVNOs face several challenges they must navigate to sustain and grow their platforms.
As the industry continues to benefit from significant growth, MVNOs must lean into their agility, innovation and customer experience (CX) focus to capitalize on new opportunities and meet changing customer needs. The global MVNO market size is projected to reach $149.13 billion by 2030, exhibiting a CAGR of 8.5% during the forecast period. This growth will be fueled by ever-increasing demand for affordable and flexible mobile plans, the rise of eSIM technology and the expansion of IoT.
Overcome Challenges, Capitalize on New Opportunities
Network limitations—such as MVNOs’ dependence on MNOs for infrastructure and potential bandwidth or coverage constraints—can impede their ability to deliver consistently high-quality service. A few of the limitations MVNOs encounter include limited coverage and network connectivity issues, which frustrate customers and lead to churn.
Brand awareness is another hurdle worth mentioning. Having to compete with MNOs’ established brands drives up the customer acquisition costs for MVNOs. Another MVNO disadvantage is that their focus on niche markets can limit their growth potential.
However, the landscape is ripe with opportunities for MVNOs that are willing to innovate and adapt. Their agility and customer-centric focus position MVNOs uniquely to capitalize on emerging trends and technologies. For example, they can cater to evolving customer needs by offering tailored plans or bundled services, or even by focusing on specific demographics. The B2B market also offers significant growth potential for MVNOs thanks to their ability to offer customized mobile solutions and IoT connectivity for specific industries.
Here are four tech innovations and how they’re changing the MVNO landscape:
- 5G networks elevate MVNOs’ capabilities with higher speeds, lower latency and more capacity. In partnership with MNOs, MVNOs can leverage 5G features like network slicing to offer advanced services such as augmented reality, IoT and specialized B2B services. By taking advantage of 5G, MVNOs can attract customers looking for the latest in fast, responsive connectivity. Their agile approach allows them to respond quickly to market trends and emerging demands.
- AI and machine learning (ML): Unlike MNOs, who often grapple with integrating AI/ML into their complex legacy systems, MVNOs can seamlessly adopt these technologies. Their modern infrastructure and lean operations allow for faster implementation and greater flexibility. This enables MVNOs to leverage AI-powered insights for hyper-personalization, targeted marketing campaigns and predictive analytics to anticipate customer needs and drive loyalty.
- The rise in IoT devices presents a vast market opportunity for MVNOs. Their specialized focus allow them to swiftly design and deploy targeted IoT solutions. Whether it’s smart home connectivity, wearable devices or industrial applications, MVNOs can develop tailored plans and services that meet specific industry needs. This agility enables them to tap into niche markets and carve out a strong position in the rapidly growing IoT ecosystem, where others may be slower to react.
- eSIM Technology: MVNOs are well-positioned to capitalize on the eSIM revolution. By eliminating the need for physical SIM cards, eSIM technology simplifies onboarding and management, significantly reducing operational costs for MVNOs. This allows MVNOs to offer more competitive pricing and invest in other areas, such as customer service and marketing. The flexibility and convenience of eSIM also appeal to the digitally savvy consumer base that MVNOs often target, providing them with a significant competitive edge.
MVNOs should also explore opportunities to forge new partnerships and create strategic alliances. Doing so can:
- Expand the customer base: Creating the right partnership can help providers, especially newer MVNOs, expand their reach and offerings. Potential mutually beneficial partners could include content providers, established brands and industry partners. For example, a partnership with a popular streaming service could attract entertainment-focused consumers, while a collaboration with a financial institution could offer mobile banking services to underserved communities.
- Beat the competition: By collaborating with technology vendors or SaaS providers, MVNOs can access the latest advancements in business support systems (BSS), and CX platforms. This enables them to streamline operations, improve customer service, rapidly launch new services and offer innovative solutions, keeping them competitive in a fast-paced market.
- Offer new services: The rise and adoption of 5G presents a golden opportunity for MVNOs to partner with other providers of differentiated services to offer tailored bundles. This is an especially potent opportunity as eSIM adoption in IoT applications and products becomes more universal.
Meet Changing Customer Needs
It’s impossible to overstate CX’s role in growing an MVNO business. Today’s customers have high expectations for service quality, personalized offerings and ease of use. A positive CX can drive customer loyalty, reduce churn and increase customer lifetime value.
MVNOs can offer targeted plans, data bundles and promotions based on customer behavior and preferences. Providing an omnichannel experience and self-service tools is another way to empower customers to manage their accounts and troubleshoot issues easily, on their own time.
MVNOs build trust and transparency with customers by being upfront about limitations and data usage policies can foster a loyal customer base.
There are several ways MVNOs can leverage CX for growth, such as:
- Personalization: Offer targeted plans, data bundles and promotions based on customer behavior and preferences.
- Omnichannel experience: Provide seamless customer support across various channels (phone, chat, social media).
- Invest in self-service tools: Empower customers to manage their accounts, troubleshoot issues and make changes easily.
- Build trust and transparency: Be upfront about limitations and data usage policies and offer clear communication.
For many MVNOs, CX is a top priority for their growth strategy. That was the case for South Africa’s Standard Bank, which introduced its MVNO offering in 2018 after partnering with MTN. In a fireside chat with CSG, Kartik Mistry, head of Standard Bank Connect, described how the bank’s decision was weighted heavily on the impact MTN’s capabilities would have on the customer’s perception of added value; in order to grow, it’s imperative to be “as close to the customer as possible,” he said.
Making Your MVNO Future-Ready
The future for MVNOs is bright despite the challenges, and the landscape is ripe with growth opportunities for those who prioritize CX, harness emerging technologies like 5G, AI, and eSIM, and forge strategic partnerships to adapt to market trends. By their agile and customer-centric focus, MVNOs can redefine the industry, challenge traditional players, and become leaders in the digital era.
As the industry continues to evolve, staying informed and engaged with the latest trends and strategies is crucial for success. Join other MVNO leaders in November at MVNO Nation, an industry event where you can explore ways MVNOs can adapt and thrive in the dynamic world of mobile telecommunications. In the meantime, you can learn more by downloading the eBook, “Unleash Growth and Supercharge your MVNO with CSG,” then reaching out to our experts about how CSG can help your business succeed.
