CommsMEA article with Brad Taylor, CEO, Workz Group

CommsMEA Regional MVNO’s with Brad Taylor

Brad Taylor, CEO, Workz Group talks to CommsMEA about the future of MNVOs in the region

Oman and Saudi Arabia are the countries in the ME that have embraced MVNOs, do you foresee MVNOs in other countries?

Definitely. Despite historical challenges, the primary characteristics of MVNOs are that they are approved by the regulator and managed by the existing mobile network operator. Once approved and paired with a host mobile operator, their job is to develop new channels to market resulting in new subscriber growth. As the market evolves, MVNOs will play a larger role as channel development partners. It is only a matter of time before other countries de-regulate and mobile operators develop new channel partners.

Why should regulators and operators embrace MVNOs in these countries?

MVNOs should grow in popularity due to the prevalent need for developing new specialist services. As niche market players, MVNOs can address segments that traditional host network operators find challenging or less interesting. Looking forward, the expected explosion of IOT and M2M solutions to a $1 trillion industry by 2020 will create immense potential. Companies offering these solutions prefer to use mobile networks rather than wired lines, to avoid various installation, flexibility and scalability issues. However, as mobile telecommunication services are costly to purchase on an item-by-item basis, it is envisaged that MVNOs can assist by selling bulk access to mobile services, manage international roaming agreements and provide trusted managed services solutions.

MVNOs are more popular in Africa, why have markets embraced them in the continent? What benefits do they bring?

MVNOs are still very weakly represented in MEA in relation to the rest of the world. The market dynamics play a part in this; maturity vs growth, many private operators’ vs one or two state operators. In Africa, specifically, ARPU is generally very low meaning MVNOs have to live off extremely slim margins. Nevertheless, there are some countries where not just one but multiple MVNOs are operating by offering something different. Financial providers such as Equity Bank, who through the role of a MVNO, are offering financial services to an extended audience who may otherwise not have had access to such services. I’m using mobile banking here as an example as it is one of the sectors that has gained most traction so far and believe the potential is there in other markets too. Where there are gaps in the market and needs to satisfy, MVNOs can thrive.

How MVNOs have shaped the telecommunications markets in the region?

MVNOs’ primary contribution to the MEA has been to offer enhanced accessibility and/or specialised services, increase competition while providing balance to market pricing and stimulating innovation. They have shown to work well in niche markets by offering value-added services to targeted markets e.g. accessibility to specialty services, lower rates to expat’s home country, etc.

What should regulators consider when offering a MVNO license?

The most important considerations are the acceptance of competition, the benefits of market segmentation and preparation for the coming of IOT.
a. As such, licensing fees and awards should be timely and commensurate to the business model. Regional license awards should be considered where possible, i.e. GCC, COMESA, SADC.
b. Number portability between MNO and MVNO networks should be simple and transparent.
c. Barriers that slow technology growth and acceptance should be removed.
d. MVNO licensees should be welcomed by the GSMA, the global telecoms industry association.
e. MVNO licensees should be allowed to sell their products in foreign (non-licensed) markets without governmental restrictions as long as they are following the conditions of their license agreements.

In which countries it will be recommendable to have a MVNO? Why?

As the future of wireless telecoms depends on innovation and growth, MVNOs will earn their place in that progress. One would expect not only will they soon be permitted in most countries but they will be widely accepted and recognized for their contributions. Moreover, one would conclude that global players like Google and Apple will soon be offering their version of MVNO services that are not part of the traditional MNO’s audience. In the Middle East, a GCC offering would be a logical move to drive regional IOT development and early adaptation.

Published in:  CommsMEA