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Transcript of MVNO’s in China - Tekes · PDF fileMVNO’s in China Kimmo Aura, Senior advisor ......
Reforming Telecom markets - focus in MVNO’s in ChinaKimmo Aura, Senior advisor
Finpro, Export Finland
Why focus in MVNO’s in China
• China has issued 42 mobile virtual network operator licenses during last years to Chinese companies
• The mobile communications market is opening to private companies
• Today 4.2 Msubs in MVNO’s in China, target 200 Msubs in 5 years.
5/12/2015 © Finpro2
Chinese MVNO Lisence holders
5/12/2015 © Finpro3
26.12.201311 MVNOs
29.01.20148 MVNOs
25.08.20146 MVNOs
20.11.20148 MVNOs
By 13.1.20158 MVNOs
The study of MVNO experience in Finland
• In March 2015 Omnitele Oy made a study of MVNO technology providers in Finland
• Following some highlights of the report
5/12/2015 © Finpro4
©Omnitele Ltd. 2015 5
ag
end
a 1. Introduction
2. MVNO: Business vs Technical Scope
3. Specific cases: China and Mexico
4. MVNO related products and services
5. Finnish Companies
6. Finpro Strategies
7. Conclusions
©Omnitele Ltd. 2015 6
MVNO: Some Key Facts and Figures Worldwide subscription base of ~117million, 1.9% of market
Forecasted to grow to 3.1% of market by end of 2018
Close to 1000 MVNOs worldwide
Largest MVNO segments
− Ethnic MVNOs for ethnic population to call friends/family overseas (eg. Lyca)
− Retailers (eg. Tesco)
− Communication providers (eg. Cable operators wanting to do triple/quad play)
Top three challenges for MVNOs
− Device Management
− Understanding and managing technology
− Billing and cash management
Source: Informa
©Omnitele Ltd. 2015 7
Key Differences - MVNO vs MNOMVNO
Have no radio base stations, and so no
spectrum licenses required
Comparatively low cost to startup, but
need agreement with a “host” MNO.
Regulations typically try to lower the
barrier of entry (Mobile Number
Portability, termination rates, etc)
Many MVNO operate on minimal staff
Flexibility to define offered services
may be limited depending on degree of
technical scope
MNO
Owns the radio network, and spectrum
rights on the relevant bands and
sometimes technologies
Very costly and time consuming to
start up, as they require physical rollout
especially of the backhaul network that
connects radio network to core network
Large organisations typically with 100s or
1000s of staff
Has full control over the whole network,
and hence full control over type of
services to offer.
©Omnitele Ltd. 2015 8
MVNO view of a Mobile BusinessComponents that MVNO can own/control (in RED)
OMC
B/OSSCRMERP
CallCentre
Retailer/Dealer Web-Shop
SIMCardsBranding/
Marketing
MSS/MGW
Inter-Connect
SIM cards = Ownership of customer!
A “Full MVNO” owns all the Red components. However MVNOs do not have to own everything,
and most don’t.
VASHLR IN
©Omnitele Ltd. 2015 9
MVNO Technical Scopes
+
+
©Omnitele Ltd. 2015 10
The value of MVNO
In this model, the MVNO is the retailer, and MNO is the wholesaler. The value of
MVNO comes from:
- Differentiated branding and marketing
- Ability to target specific market segment(s) with either specific services/
packages or simply with a brand, typically in market segment where the host-
MNO does not have an offering for.
- Ability to sell through different channel which is typically lower cost than sales
channels of MNOs
Keyword: Value
MVNO provide value to customers beyond what MNO can offer
Keyword: Cost
MVNO must be able to sell the service at lower cost compared to the MNO
©Omnitele Ltd. 2015 11
MVNO Cost Considerations
On top of direct costs associated with the host MNO, below are a few costs that
can be significant:
BSS/OSS, interconnection costs
SIM card distribution costs (also SIM card costs and phone number costs)
Fraud/Fraud prevention costs
Customer care costs
Marketing costs
Security costs
Especially at start of operations: efforts associated with agreeing Operational
processes with the host operator can be very intensive.
©Omnitele Ltd. 2015 12
Uses functionality of
Related Solutions and ServicesSolutions and Services related to this Pre-Study can
be classified into the following types:
1. Enable the creation of MVNO
(also known as MVNE: “E” = Enabler)
For MVNOs – this is the most important component,
and every MVNO would need such systems.
Any marketing campaign labelled “MVNO” should have strong
offering in this area.
2. Enable the creation of MNO (may also enable MVNO)
3. Application – of sub-types:
a) provide additional value for business case for the MVNO (including
security and other applications)
b) provide value to society as a whole (eg. related to e-Health/e-
Learning/e-Government/etc)
4. Others (eg. Devices, Marketing/Strategy)
Network/MNO
MVNO
DeviceUses services of
Uses network of
ApplicationUses features of
Users
©Omnitele Ltd. 2015 13
Service Activation/Usage FlowOne of the most basic MVNO activity is the business process of activating a customer in
the network, charge / bill them, and accepting payments. This is the function of the BSS/OSS
systems and therefore BSS/OSS is the most basic Enablement requirement for the MVNO.
There are many other types of flows. Eg subscription change, SIM change..
Network/MNO
MVNO
Device
Application
Customer arrivingat a sales point
(physical or virtual)
Customer selectsproduct from a
product catalog
Order is placedand is broken down
into individual productcomponents
Components arecommunicated for
fulfilment: customersprovisioned & activatedin all relevant databases
Logistics are triggered(eg. phone/SIM delivery,
number portabilityrequests)
Network allows/deniesservice when customer
tries to use servicebased on subscription
Call Records are generated during usage,they are correlated and
summarised (mediation)
Charging is donewhere usage is tallied
up for billing, or quota/balance is subtracted(Postpaid vs Prepaid)
Bills are sent regularly,or recharge notificationssent when credit runs low
Recharging or bill paymentis done through available payment
channels (phone, online, ATM…) usingone of available payment methods
(credit card, bank transfer, credit/gift voucher, Paypal…)
©Omnitele Ltd. 2015 14
MVNO – EnablementThere can be two halves to the enabling elements, especially in bigger networks:
1. The customer facing systems – web portals, billing systems, etc. Typically this is referred
to as the BSS
2. The network facing systems – systems that instruct the network what to do, and
responsible for orchestration (creating customers in databases, activating relevant
logistics, etc). This can sometimes be referred to as the OSS. *
Following are companies in Finland that operate in this space:
SIM Cards, while not commonly seen as part of the network, does play a big role in establishment of MVNOs. In Finland there is only one company that is known to produce SIM cards:Name
Name Main Area
Tecnotree BSS (also has voicemail solution)
Qvantel BSS
Comptel OSS
Good Sign BSS/OSS
CBOSS Finland BSS/OSS
Airbus D&S BSS/(OSS) – Niche market
Network/MNO
MVNO
Device
Application
Gemalto SIM cards
©Omnitele Ltd. 2015 15
MNO related Solutions & Services
There are a number of companies in Finland who offers MNO related solutions,
more related to infrastructure, radio networks, etc. The categories are listed
below:
Wind energy and power management solutions
Cables
Network performance testing and SLA monitoring
IP Network equipment and Firewalls
Network Consultancy
Network rollout and infrastructure maintenance
Full listing of contacted companies are in the Excel file.
Network/MNO
MVNO
Device
Application
©Omnitele Ltd. 2015 16
MVNO – ApplicationsWhile the target of the study was to look into MVNO, a number of companies were
reached out in areas of:
eLearning
eHealth
eGovernment
Identity Services (Mobile ID, Web identification)
Security (Encryption, Data Erasure, Email Security, Web Safety)
Devices and Device Management
Some of these companies have products that would benefit citizens countrywide (that could
appeal to government organisations) and give appeal to utilising mobile network
(MNO/MVNO) for such applications.
Some other applications have narrower target market and can nevertheless be of value to
specific MNO/MVNOs.
Full listing of contacted companies are in the Excel file.
Network/MNO
MVNO
Device
Application
©Omnitele Ltd. 2015 17
MVNO Suppliers Summary/AnalysisWithin the circles are businesses that would have a direct
business relationship with MVNOs. Each circle is a category:
Enablement, Value Add (allows for MVNO differentiation),
Applications.
MNO Enablement is in a separate box and is nevertheless
required in the background of the MVNO.
A number of products are extremely niche products and cannot
be directly “related” to others, and so the offerings are difficult to
link together to form a “picture in unison”
Attempts to pair (or group) different companies in this picture has
not been successful to significantly improve the value proposition
beyond what each company already has to offer.
Good Sign
Tecnotree
Qvantel
Value-Add
Enablement
Applications
ExomiAirbus D&S
Methics
Luxus
Omnitele
Nokia
Windside
MNO Enablement/Value-Add
Reforming Telecom markets - focus in MVNO’s in China
• We need your opinions, ideas and proposals for developing a “Team Finland Growth Program” related to Reforming Telecom markets - focus in MVNO’s
• Focus markets for Growth program
– China – 42 new MVNO licenses
– Mexico – huge telecom reform going on
– Some interesting European (MVNO) markets
– DO YOU SEE BUSINESS OPPORTUNITIES
WITHIN MVNO MARKETS ?
5/12/2015 © Finpro18
Reforming Telecom markets - focus in MVNO’s in China
• We need your opinions, ideas and proposals for developing a “Team Finland Growth Program” related to Reforming Telecom markets - focus in MVNO’s
• Focus markets for Growth program
– China – 42 new MVNO licenses
– Mexico – huge telecom reform going on
– Some interesting European (MVNO) markets
– DO YOU SEE BUSINESS OPPORTUNITIES
WITHIN MVNO MARKETS ?
5/12/2015 © Finpro19
Contact:Kimmo AuraSenior AdviserFinpro, Export [email protected]+358 40 504 8317