How can outsourced integrated business support systems help MVNOs?

It's fair to say that, since their deployment in the early 1990s, Mobile Virtual Network Operators (MVNOs) have proven to be a real revenue-generating asset in the communications marketplace.

Overall interest in the MVNO business model has fluctuated in recent years, and quite recently we've seen a vast upsurge in interest. This interest has extended across a wide range of services; the rise of data MVNOs for services such as machine-to-machine (M2M), as well as cloud service aggregators that can support bring your own device (BYOD) demands for small and medium enterprises.

If the recent MVNO congress in Paris is anything to go by there is plenty of opportunity in the market for a new influx of MVNOs. That said, what is needed to successfully launch and manage a compelling mobile offering that can be seamlessly delivered to the customer?

Several factors point to the outsourcing of integrated business support systems (BSS) as the key to successful start-up. Without the same technological legacies of Mobile Network Operators (MNOs), the managed service model would offer MVNOs an improved time-to-market and lower operational costs.

For MVNOs, however, there is an equally strong need to maintain control over their services and delivery, which often points to the need to own the back-office infrastructure and get as close to the core network as possible.

Integrated BSS – where billing, policy and charging, and analytics components work in unison to deliver a seamless customer experience – offers a lower risk, hybrid model that can provide the necessary control without the cost and complexity of owning the entire stack.

While it can make sense for a well-established MVNO with a growing and profitable customer base to invest in infrastructure for greater control, the danger for greenfield start-ups is that when cost and complexity are front-loaded they often become the critical determining factors of an MVNO’s fortunes, rather than the strength of its market proposition.

To put that in context of today’s marketplace, with traditional mobile voice and messaging revenues in decline, there is an opportunity for MVNOs to develop convergent market offerings that, through strategic commercial partnerships, combine mobility with cloud computing and over-the-top services.

In a multi-faceted business model that combines telecoms and IT, there is a need for deeper granularity in rating and billing, such as linking price plans, quality of service, and greater assurance of the overall customer experience through integrated policy management and data analytics. An integrated BSS solution can significantly help to support this proposition.

In a challenging economic climate, MVNOs must manage supplier costs and optimise operational cost-efficiency such that they can present competitive market propositions without prompting a ‘least cost’ price war, something that can devalue brand credibility and introduce financial risk.

As such, MVNOs could look to outsource BSS operations to leverage economies of scale and cost efficiencies without the risk of sacrificing control.

Ultimately, an intelligent, outsourced integrated BSS solution can provide MVNOs with the least risk and greatest control for revenue-generation in a competitive market.

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