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No more racing to the bottom: MVNOs to major on customer service

MVNOs

via Flickr © MIKI Yoshihito (´・ω・) (CC BY 2.0)

  • 54 per cent of MVNOs see adding new offers or lines of business as an important growth engine  
  • 38 per cent plan to launch new MVNO brands or expand internationally
  • 33 per cent plan to add entirely new lines of business
  • 8 per cent think they can grow by offering better pricing

Mobile Virtual Network Operators (MVNOs) are limbering up to take a larger share of the European mobile market, according to a new study from Amdocs and consultancy Telesperience, which has been surveying MVNOs to find out what’s driving them in an increasingly crowded market.

The classic MVNO has traditionally been a bit of a discounter, just for table stakes. And on top of keen pricing, some strong branding has usually been necessary along with a handy demographic to target.

But now, according to Amdocs and Telesperience, MVNOs feel they have the ability to generate significant customer service improvements and value-added services to make themselves stand out in the crowd. And they plan to use these to go after their rivals’ customers, not just (as in the past) to dig new customers out of niches that network operator haven’t been willing or able to target

The study found that 67 per cent of  MVNOs in Europe plan to differentiate by focusing on customer service, and 63 percent by adding value with new services, while only 46 per cent plan to continue to focus on providing cheaper prices as a strategy for growth.

“The European MVNO market has matured to a point where discounting as a strategy is no longer sufficient to guarantee success,” said Teresa Cottam, chief strategist and founder at Telesperience, who led the research on behalf of Amdocs. “Having the right systems in place is crucial for Communications Service Providers (CSPs) looking to differentiate with improved customer experience offerings.  

As a result MVNOs are bullish about their future and claim they’ll grow at an average rate of 45 per cent over the next two years, with 25 per cent predicting a growth rate of more than 100 percent over this period.

According to Teresa Cottam of Telesperience, given that many of these companies operate in saturated markets it means that they expect to grow organically by taking subscribers from their rivals.

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