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.

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Chinese MVNO Lisence holders

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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

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©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


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


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.


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


MVNO Technical Scopes

+

+


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


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.


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


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…)


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


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


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


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

mailto:[email protected]

mvno’s in china - tekes · pdf filemvno’s in china kimmo aura, senior advisor ......

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