Break down the silos and enable the digital economy

MVNE Digital Economy Enabler in Thailand

In this – our third and final article of a three-part series, regarding unused MVNO capacity and reluctance towards MVNOs, among the mobile network operators in Thailand, we take a closer look at a possible solution to break down the silos and enable the digital economy

A proposed solution would be a one-stop shop, who acts as an enabler or “clearing house” for the digital economy, MVNOs/M2M/IoT service providers, e.g. matching the demand, with the supply of unused MVNO capacity from the telecom operators, and thereby creating a win/win for all stakeholders in the ecosystem.

In other words, what is known as a Mobile Virtual Network Aggregator (MVNA) and Enabler (MVNE)

Figure 1: Proposed solution to underutilized capacity – an enabler for digital economy services (MVNO/M2M/IoT)

MVNE a Digital Economy Enabler in Thailand

A MVNE is an entity, which provides a platform infrastructure along with a portfolio of add-on services – together with telecom, MVNO and market knowhow. It matches up MVNOs (incl. M2M/IoT) business cases with telecom network operators, to enable the service to the end-users.

The sharing of mobile networks systems is already present in the telecom sector and MVNO sphere, where mobile virtual network enablers (MVNE) provide core systems and platform for use by multiple MVNOs.

The MVNE becomes the key enabler and supporter, by providing a turnkey solution, capable of “plugging-in” new MVNOs and service providers, and scaling up subscribers quickly, which lowers barriers to entry. It provides systems integration expertise complementing the telecom network operator and the MVNOs expertise.

The right MVNE should not only provide a technical platform with real-time rating and charging platform (Billing), Custom relation management system (CRM), SIM cards and handset management, Data intelligence, apps and modules to support point-of-sale, and distribution functionality, etc.

More importantly, it should share its experience in defining, launching and operating successful MVNOs in combination with local retail and market experience, and the right tools to meet and analyze the targets in the Thai market.

Consequently, providing the telecom network operators and MVNOs with the flexibility to select the most suitable operating model to overcome key entry barriers.

Figure 2: Benchmarks suggest that MVNE/A-supported MVNOs require approximately 60 times less subscribers to break even

MVNA and MVNE drives MVNO growth

THE MVNE/MVNO/OPERATOR ECOSYSTEM = WIN/WIN
  • The MVNE negotiates interconnection and wholesale deals, individually with the telecom network operators, and then packages the airtime with a set of its own value-added services and platform.
  • The MVNO or service provider signs a contract for airtime and services (revenue share or similar) with the MVNE of a telecom network operator according to their choice.
  • The MVNE manage different technical architectures, which must be accepted and validated with the telecom network operator in order to provide the MVNOs or service providers with the right tool to create their own packages.
  • The MVNO launches its operations on the market via the MVNE platform without the need to invest in its own technical infrastructure.
  • The MVNE can provide its services to an MVNO or to the telecom, network operator and can adapt these to the needs of the customer (MVNO or Telecom Network Operator).
  • The ability to sign up and support several MVNOs through a multi tenant architecture is critical for a win/win setup, and to achieve economy of scale.
  • As the business setup between the MVNE/MVNO/Telecom network operator is mostly revenue share based, it is in the interest of all stakeholders that the service becomes a success = win/win.

The MVNE offers a complete platform allowing MVNOs to launch their business in the Thai market with minimum investments and telecom expertise. At the same time, the platform helps the mobile operator easily manage the partnerships with MVNOs, obtaining revenue from wholesale at no extra costs.

MVNE’s has been a well-known solution for years, coincidently in countries who also rank in top of ICT and Economy, and has proven the ability to speed up the offering on new services and promotions by bypassing constraints and delays.

A MVNE solution would promote competition, increase efficiency, reduce duplicate investment, and inject greater vibrancy into the Thai telecom landscape, and the vision of building Thailand’s Digital Economy.

The one-stop enabler would be very well suited as a trial for Thailand’s National Telecom Pool, maintaining the leasing of airtime between the private and public operators, as the MVNE is independent and not tied or linked to any specific operator.

The MVNE will build the necessary infrastructure support all standard network interfaces and connect the core service platform to the telecom network pool.

It can bring in additional service from the vast pool of opportunities that already exist, or will be innovated with digital economy in Thailand, as well as actively seek and bring in MVNOs and service providers (IoT/M2M) to the service.

The low barriers of entry also enables more innovation and revenue options to small medium enterprises (SMEs) and start-ups, as the MVNE architecture allows constantly deployment of innovative offers in line with the spirit of the digital economy.

A MVNO or Service provider needs to meet a set of key criteria for success e.g.:
  • The MVNO/Service provider management team needs to have a solid understanding of the mobile market, and have capabilities in the telecom ecosystem.
  • The MVNO/Service provider need to rapidly grow its customer base in order to reach financial breakeven. As such, short time to market is absolutely critical.
  • The MVNO/Service provider brand needs to be, or become widely recognized in the target market, in order to achieve the necessary scale level.

Therefore, it is critical for these providers to be organized around a centralized facility like the MVNE, which yields economies of scale and operations and thereby yielding lower entry costs along with other benefits for the whole ecosystem, very similar to what we know from cloud services.

BENEFITS FOR THE MVNOS/SERVICE PROVIDERS
  • Easy way to adopt new technologies,
  • Do what they do best and outsource the rest,
  • Get guidance – no telecom experience necessary,
  • Significant reduction in necessary Infrastructure investments,
  • Flexibility to position themselves optimally along the value chain,
  • Getting to market quickly – months, before they would be able to launch otherwise,
  • As the MVNE will host a large number Of MVNOs, it will be possible to achieve economies of scale and thereby cheaper services,
  • Focus on sales, marketing and distribution while leveraging expertise and experience from a specialist service and infrastructure platform.
BENEFITS FOR THE NETWORK OPERATORS
  • Increase wholesale and revenue,
  • Significant positive impact on Profit & Loss (P&L),
  • Provide better utilization of the spectrum and achieve faster ROI for the associated CAPEX,
  • A one-stop-solution, which dramatically decrease the time, needed to launch MVNOs,
  • Save on infrastructure, subscriber acquisition costs, workload, and platform expenses with no risks, while gaining network market share,
  • Don’t have to deal with administering the heavy processes associated with the launch and day-to-day operations of each individual MVNO,
  • Higher service quality as a dedicated MVNE is more responsive to the different demands of each MVNO,
  • Address specific/niche market segments through MVNOs and gain healthy and sustainable local and international MVNOs.
BENEFITS FOR THE COUNTRY
  • Develop the telecom sector and enable digital economy,
  • Efficient utilization of network resources – a national asset,
  • Foreign and local investment in to the industry directly and in-direct,
  • Consolidate a fragmented ecosystem to enable fast IoT M2M services,
  • Bridge digital divide with MVNOs serving unserved/underserved segments,
  • Inject a new level of competitive robustness into Thailand’s mobile market,
  • Become a “study book example” due to its significant value beyond Thailand’s borders,
  • Create ICT-skilled employees directly/indirectly via the MVNOs, vendors, suppliers and business partners,
  • Long-term benefits for consumers through additional, innovative and competitive offerings.
OPPORTUNITY TO DRIVE INNOVATION AND ECONOMIC DEVELOPMENT

In this three part series, we have outlined issues and recommendations regarding MVNOs, spectrum capacity and telecom network operators in Thailand, as well as for the introducing of a one-stop digital economy enabler to Thailand.

A number of local and international players have already shown interest in establishing an MVNO and service provider business in Thailand. Thailand’s unique characteristics and the rich diversity of the local market allow for a number of niche segments that these service providers could target.

Considering Thailand as a center of the ASEAN, – foreign and local investors have eyes on the opportunities to use the Thai ICT market as a springboard to other countries.

We believe the approach outlined above will utilize the spectrum resources more effectively in Thailand, achieve the broader industry objectives of driving innovation and economic development.

You can download our whole three part series – as one whitepaper on slideshare
The first article in the series: Unused MVNO network capacity in Thailand
And the second article: Why MVNOs in Thailand have failed.

CONNECTING THAILAND’S DIGITAL ECONOMY

Unused Spectrum Capacity, MVNOs and Digital Economy in Thailand

DEFINITIONS USED THROUGHOUT THIS DOCUMENT

MVNO – MOBILE VIRTUAL NETWORK OPERATOR It is an organization, which offers mobile services. The MVNO does not own spectrum, instead it enters into an agreement with either a network operator or MVNA to obtain bulk access to network services at wholesale rates, and then sets its retail prices independently. An MVNO may use its own customer service, billing support, marketing systems or employ these services from a MVNE

MVNE – MOBILE VIRTUAL NETWORK ENABLER It is an entity, which provides infrastructure and services to both network operators and MVNOs, which enables existing, and new MVNOs to offer their services on the operator’s network, while leaving the backend enablement to the MVNE. The MVNE provides services, such as billing, business workflow, product setup, service delivery, customer care, fraud management, web services, reporting, sale platforms, etc.

MVNA- MOBILE VIRTUAL NETWORK AGGREGATOR The MVNA is an entity, which purchases mobile airtime in bulk from the partner network, and then wholesales this airtime and service to multiple MVNOs, who each in turn sells the mobile service to end-users.

MVNA/MVNE – MOBILE VIRTUAL NETWORK AGGREGATOR & ENABLER is a combination of, Mobile Virtual Network Aggregator and Enabler. The MVNA/MVNE is an entity, which purchases mobile airtime in bulk from the partner network, adds its service platform (MVNE) on top, and then wholesales this airtime and service as end-to-end to multiple MVNOs and service providers.

Author: Allan Rasmussen
Managing director at Yozzo. Allan’s expertise includes the development and execution of growth strategies, market insights, trends and opportunities, new business models and strategies
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