Business Innovation Session: Developing new

Business Innovation Session: Developing
new mVNO businesses
Miguel Ángel Suárez
mVNO Networking Congress
November 2010
Either as incumbent or as challenger, KPN has bet on the wholesale
market to consolidate or develop its market position…
AN EXAMPLE OF A “BELIEVER” MNO
Multi Brand mVNOs
Own MNOs
Strategy
• KPN traditional and Telfort
alternative
•The multibrand strategy allows
KPN to
t address
dd
more efficiently
ffi i tl
targeted market sgments with a
brand and offer tailored to their
needs
Netherlands
• 50% Market Share
Belgium
• BASE is the 3rd operator in
Belgium
• 15% Market Share
Own Brands
Partner Brands
•This strategy implies the launch
of own brands and/or the
partnership with third party
brands, reckoned in their
markets through “branded
markets,
branded
reseller” or “joint venture”
partnerships
Germany
• e-plus is the 3rd operator,
faster growing in a penetrated
market
• 13% Market Share
•A relevant number of these
brands has been finally acquired
by KPN, demonstrating the
validity of the multi-brand case
2
…so they decided to expand that strategy into new markets by putting in
place an mVNO strategy ( “asset light”)…
AN EXAMPLE OF A “BELIEVER” MNO
KPN I strategy
Spain & France as first implementations
•Asset-light strategy:
• Only mVNO proposals
• Resources shared, lean organizations
and outsourced operations
•Multi-country
Multi country approach using a
common platform:
• Central: network, IT systems
• Local: Mkt, Sales, Logs, CuCa
•Multi-brand diversification:
• Top target segments: no-frills, ethnic,
distrib tion
distribution
• Own brands & champion partner
brands
3
…with quite positive results already one year after launch.
AN EXAMPLE OF A “BELIEVER” MNO
Total active subscribers in Spain of KPN/e-plus brands (000)
1000
900
800
700
600
500
400
300
200
100
0
2007
2008
2009
4
Agenda
The “mVNO movement” around the globe
An mVNO Case Study: the US
Business Innovation Workshop
Business Innovation Session
Page 5
Across the world, the “mVNO-meter” is high: the “mVNOmovement” is growing and demonstrating it is here to stay.
THE MVNO MOVEMENT AROUND THE GLOBE
North Am.
~12%mVNOs
Europe
~74% mVNOs
2nd wave US,
driven
d
e by
nofrills/retail
Established
environment:
fluid mVNO
dynamics
Asia
~5% mVNOs
Cons. in several
countries. New
success stories
Middle East
~<1% mVNOs
LatAm.
~<1% mVNOs
Africa
First mVNOs
in Col, Arg,
CR. Brazil to
come in 2011
Business Innovation Session
Presence in
South Africa &
ongoing
discussions in
severall cos.
Page 6
Fi t mVNOs
First
VNO
up & running
in Oman &
Jordan
Australia
~7%
7% mVNOs
VNO
Consolidated
in Australia &
New Zealand
Most of the international groups have already developed mVNO
propositions in their home & key markets.
ORIENTATIVE!!
THE MVNO MOVEMENT AROUND THE GLOBE
Source: Total Telecom mVNO database
Business Innovation Session
Page 7
Agenda
The “mVNO movement” around the globe
An mVNO Case Study: the US mVNO market today
Business Innovation Workshop
Business Innovation Session
Page 8
The US has gone through all the mVNO phases but, at the end of
the day, it has consolidated a strong mVNO business
AN MVNO CASE STUDY: US
• We all know about failed mVNO ventures such as Helio, Amp´d Mobile, ESPN or
Disney
y Mobile…. but what is the situation right
g now?
*
19.907
21.440
22.383
*
23 986
23.986
*Virgin & Boost not included. Source: companies financial statements & own elaboration
24 Mio Subs in
mVNOs: 9,2% of
total market**
20,49%
20
49% growth in
mVNO Net Adds vs.
1,24% in own brands**
**E l di connected
**Excluding
t dd
devices
i
Business Innovation Session
Page 9
7%-13%
7%
13% of mVNO customers** in
wholesale (~20% Sprint w/Virgin & Boost),
10-25% of Gross Adds **
This growth is distributed among a number of different mVNOs,
addressing different segments…
AN MVNO CASE STUDY: US
Not exhaustive
Unlimited
Prepaid
Pay as you go
Prepaid
Youth/
Seniors
Tracfone
+ Net10
Jitterbug
Ethnic
Telecom/
Cable
MVNE
StraightTalk
(Tracfone/
Walmart)
Verizon
PagePlus
AT&T
H2O Wireless
PureTalk
Boost
iWireless Home
S i t
Sprint
(K
(Kroger
“Tesco”)
“T
”)
Total Call
PlatinumTel
SimpleMobile
T-Mobile
iWireless (Iowa)
Tracfone
+ Net10
H2O Wireless
PureTalk
Consumer
Cellular
Firefly
RedPocket
H2O Wireless
Tracfone
Common Cents
(Walmart)
iWireless Home
(Kroger “Tesco”)
ReadyMobile
Liberty Wireless
Tracfone
(small share)
Virgin
C d M
Credo
Mobile
bil
kajeet
KDDI
STi Mobile
Comcast
Ti
Time
W
Warner
cBeyond (SME)
iWireless
(Kroger)
Telespree
(mBB)
PC Mgmt
iWireless
(regionals)
Source: own analysis
10
…but a significant part of the growth has been captured by
Tracfone, the largest mVNO worldwide, part of América Móvil…
AN MVNO CASE STUDY: US
Tracfone EOPs `(‘000)
26,2%
,
20000
15000
16657
13201
• Tracfone is the largest mVNO worldwide
10000
5000
0
Q309
Q310
ARPU (USD)
37,6%
15,00
13,29
• Around 50-70% of those new clients
could come from StraightTalk, brand
launched together with Walmart…
9,66
10,00
• And furthermore, its business has had
significant acceleration in the last year
5,00
0,00
Q309
Q310
Quarterly revenues (MUSD)
800
600
73,6%
738
• … so Walmart could have made ~1,7-2,4
Mio subscribers in 1 year…
425
• … and with ARPU of 30USD, its yearly
revenue could be ~620-870 MUSD.
400
200
0
Q309
Business Innovation Session
Q310
Page 11
…thanks to an incredible success of Walmart Straight Talk
launch, that is currently being expanded into new markets
AN MVNO CASE STUDY: US
October 2009
July/august 2010
September 2010
October 2010
¿?
Launch
Agreement w/
ATT&T-Mobile
Launch
Walmart
Family
Introduct. of
smartphones
Potential
evolution
Offer upgrade to
meet the
Christmas
campaign
More
smartphones and
high-end
g
devices?
Progressively
alining
g Walmart
offer with that of
the MNOs.
Data mVNO like
Best Buy?
y
New brand, not
Walmart´s
CDMA Only with
Verizon
Wider portfolio of
devices at
signficant
g
lower
cost
Own brand used
Better gross
margins
g
Business Innovation Session
New segment
addressed:
50%US market
First p
postpaid
p
service
Page 12
Expansion of
operations
across LatAm?
Agenda
The “mVNO movement” around the globe
An mVNO Case Study: the US mVNO market today
Business Innovation Workshop
Business Innovation Session
Page 13
The mVNO models are diverse and -still- open to imagination, yet
they need clear vision and action to become success stories.
MVNO MODELS
“Traditional” models
“New” models
Banking
M2M
Retail
Charity
SMS only
Ethnic
Children
Elderly
Community/clubs
Travelers/VoIP
Discount/
no frills
Data-only
SMEs
Media
Telco
VoIP/Innov P&S
Etc.
Business Innovation Session
Page 14
Now imagine you are an mVNO entrepreneur… how would you
reshape the mVNO Business?
WORKSHOP DYNAMICS
• Think of an mVNO for the new wireless world:
–
–
–
–
–
New connected devices: ebooks, house appliances, cars, laptops, cameras, photo frames…
New wireless device manufacturers: Apple, Lenovo, Google, Dell, Amazon ...
New online communities and sticky services: Facebook, Tuenti, Youtube ...
New telco services and over the top plays: roaming, VoIP, SMSoIP …
New geographies, with new models: Asia, Latin America, Africa …
• Break into groups. Each member should propose an innovative value proposition
and a market. Choose one and develop it together.
• Examples:
–
–
–
–
–
–
–
The mVNO of the car manufacturers
The mVNO of the people with income below 100USD
The mVNO of Facebook, Google or YouTube
The mVNO of Apple or HP
The mVNO of Mediamarkt or Radio Shack
Th mVNO
The
VNO off the
th evangelic
li community
it
The mVNO over IP
• You have 30 minutes to prepare a presentation
presentation. At the end
end, one or two of the group
members should do the presentation to the public.
Business Innovation Session
Page 15
Example of questions to answer
• Market proposition: what is the target segment, the positioning and the market
proposition
p
p
and what makes it different?
• Opportunity assessment: why do you think the opportunity will be successful?
• Entry strategy: how will you develop that opportunity?.
– Branding/positioning.
– Offer: p
portfolio,, products
p
& services,, p
pricing,
g, p
promotions,, customer service,, etc.
– Channel: direct or indirect, traditional or new
– Communication strategy
• Key success factors: what aspects will be critical to succeed?
prepare
p
a small presentation
p
and select two people
p p to present.
p
• Remember: p
Business Innovation Session
Page 16
THANK YOU
Miguel Ángel Suárez
+34 644 100 002
miguel suarez@gmail com
miguel.suarez@gmail.com
Business Innovation Session
Page 17
Update on market evolution and insights
Competitive landscape: information update
• Launched in Q4/09
• SIM-only play over TMUS
• Low –cost unlimited: $40
T+T unlimited, $60 All
Unlimited
• Estimated
E ti t d 350k active
ti subs
b
• 30% data plans
• Main distribution is
independent retailers
• Very low-cost platform
(200k$)
•
•
•
•
Launched in Q4/09
Walmart low-cost offer
Verizon, AT&T & T-Mobile
Large Bundles &
Unlimited: $30 1000 T+T,
$45 All U
Unlimited
li it d
• Estimated gross adds
Q210 ca 400K
• Positive impact on Verizon
wholesale Gas…
• …led to new ATT contract
• MVNO w/ Verizon
• Estimated customer base
>1mn
• Large bundles & unlimited:
$30 1200 T+T, $45 All
U li it d
Unlimited
• Independent retailers and
POS-driven approach
• Launched new payLo subbrand to mid-market: 400
min for 20$.
• Plus competitive 1200
bundle at 40$....
• …yet,
t unlimited
li new
it d att 60 iis
turning not competive
• Gaining significant market
awareness and share
• Lowest T+T+D Unlimited at
40$, best market deal
• 40$, not 40$-ish
• Charge
Ch
for
f remaining
i i VAS
and features
• Independent dealers and
some key chains
• Best market performer
OTHERS
• Fixed in Round-Down
message and best-inmarket offer of 6c/min…
• …yet, no signs of a betterthan-market performance in
the last q
quarters
• Online and chains as main
channels
• Revamped operations with
wide portfolio of plans,
from pay-per-use @ 5c to
Unlimited to $50 T+T`W
• Introduction of some
smartphones in portfolio
•
•
•
•
•
MVNO w/ Sprint
Ready Wireless & Trumpet
30k retail locations,10kmBB
ZERO cost CPGA
Low-cost bundles & unl,;
$20 20 T+T,
T T, $30 1000
• Get ready roll-out expected
Q4/10 as replica to Straight
• Deals with Dollar General,
CVS and Radio Shack
• Growth- separate of Straight
Talk not that clear…
• …but consolidated brand,
market and differentiation in
prepaid….
• …i.e. highly accepted by
low-usage 55+ white
americans
• Net10 brand widely present
but seems also limited
impact
• Cricket signed national
mvNO deal with Sprint
• Verizon launched low-cost
prepaid and prepaid
smartphones
• AT&T tiered data plans
Market growth driven by mid usage (high bundles or low-cost unlimited)
18
Over-the-top virtual MVNO
Benchmark: pinger’s textfree
• Value proposition:
• Free text messaging with second mobile number
• Company
C
hi
history
t
• Launched in August 2006 as Voicemail service
• Launched textfree in March 2009
• Feb 2010:
• Reached profitability
• 1bn text sent during last 9 month
• 15mn downloads across all apps (14 apps, all
Top100)
• September
S t b 2010
2010:
•
•
•
•
•
•
•
3.5bn texts sent since launch (18mth)
1.4bn ad impressions per month
Application downloaded 7mio times
Users open
p on avg.
g 10 times p
per day
y
70% are on ipod touch
Advertising model (eCPM est. $1)
$6 per year ad free (premium version)
• Next
N t steps
t
• Plans to expand into mVoIP
19
En Octubre del 2009, Walmart apuesta en EE.UU por el mercado
de OMV lanzando el servicio Straight Talk.
CASO WALMART US > JUSTIFICACIÓN Y LANZAMIENTO
Factores clave en el lanzamiento
• Walmart lanza en Octubre de 2009 su apuesta por el
negocio móvil tras los “fracasos” de otros OMVs en
EE.UU. como Disney Mobile, ESPN o Helio, pero con
referencias
f
i de
d éxito
é it en OMVs
OMV de
d distribución
di t ib ió en Europa
E
como Aldi en Alemania o Tesco en Reino Unido.
• En vez de desarrollar un acuerdo propio, se apalanca en
l servicios
los
i i de
d un enabler,
bl Tracfone,
T f
del
d l grupo América
A éi
Móvil, con experiencia contrastada en el negocio móvil y
economías que le permiten competir en precio.
• L
Lanza una marca nueva separada
d y diferenciada
dif
i d –
StraightTalk- pero a medida que ésta tiene éxito
crecientemente la asocia de forma visual a su propia
marca Walmart.
• Oferta en sus 3000 tiendas permitiendo que la marca
conviva con su oferta previa de todos los operadores,
pero asegurando un producto competitivo.
Business Innovation Session
Page 20
Walmart dirige Straight Talk al mercado masivo (excepto el
familiar) con una oferta competitiva y un posicionamiento fuerte.
CASO WALMART US > POSICIONAMIENTO GENERAL
Posicionamiento
• Oferta dirigida al público masivo
producto “prepago”
p p g que
q simplifica
p
el
• Venta sólo de p
proceso de venta en tienda al hacerlo desasistido
• Posicionamiento y comunicación de “ahorro” en
línea con su estrategia
g general
g
“save money,
y, leave
better” y transmitiendo siempre un beneficio
relevante al cliente.
• Oferta tanto de SIM-only
y como de terminales -en
línea con la demanda del mercado-. Diez a quince
referencias de terminales, no más para mantener el
foco. Opción innovadora de terminales de segunda
mano “puestos a nuevos”.
• Sencillez en la contratación y en el servicio –100%
externalizado a Tracfone- para permitir el enfoque
de Walmart en marketing y ventas.
Business Innovation Session
Page 21
El principal atractivo es un nivel de precios muy competitivo en
el mercado, para lo que precisa las economías de Tracfone.
CASO WALMART US > COMPETITIVIDAD DEL PLAN DE PRECIOS FRENTE A LA OFERTA DEL MERCADO
Principales planes de precios en EE.UU
Plan
l
Cost
Name
USD
Best price deals in pay per use
CommonCent Basic
CommonCent Basic
Net10
Basic
Boost
Basic
Virgin
Basic
Best prices
Pageplus
StraighTalk
Virgin
Virgin
Pageplus
Pageplus
Tracfone
T-Mobile
Pageplus
Tracfone
Tracfone
Tracfone
T-Mobile
in bundles
Bundle
Bundle
Bundle 40
PayLo
Bundle
Bundle
Bundle w/2xmin
Bundle
Bundle
Bundle
Bundle
Bundle online only
Bundle
Minutes
i
Minutes
20
30
30
10
30
30
40
20
50
25
80
100
10
80
20
10
10
Validity
lidi
Months
Price/min
i / i
USD
1
2
2
3
3
1200
1000
1200
400
1000
400
900
1000
100
450
60
30
30
1
1
1
1
4
4
3
12
4
3
3
3
3
Other
h b
benefits
fi
• Sencillez en la propuesta: dos
planes de precios pero
atractivos para una parte
relevante del mercado.
0,0595
0,0595
0,1
01
0,1
0,2
0,03 Plus 1200 Txt & 50 MB
0,03 Plus 1000 Txt & 30 MB
0,033 Plus Unlimited data
0,05
0,05
0,06
0,09
0,10
0,10
0 18
0,18
0,33
0,33
0,33
Best price deals in unlimited
talk&text
Metro
Simple
Straightalk
Pageplus
Boost
Virgin
Unlimited
Unlimited
Unlimited
Unlimited
Unlimited
Unlimited
Business Innovation Session
40
talk&text&data
40
60
45
Oferta StraighTalk
• Posicionamiento en línea con
el mercado: no el más barato
pero sí muy
p
y competitivo.
p
• Apalancamiento en la marca
Walmart para transmitir
fiabilidad y calidad.
• Posicionamiento en lineal
similar a las otras marcas,
permitiendo comparación.
p
p
Tax included
• Comunicación en medios
propios: PDV, folletos, web.
45 Plus 20MB
50
60
Page 22
Simyo Spain
A full online proposition, with an attractive shop and a comprehensive customer care tool online
An attractive shop online…
…and a comprehensive online tool
23