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Seven ways MVNOs and digital brands can win in a recession

15 February 2023

MVNO B2C Customer Experience Management MVNOs Covid-19 Brand Loyalty Brand Perception Digital Customer Experience Digital BSS

By John Burton, CEO, MDS Global. 

Since joining MDS Global, I’ve been meeting with customers to learn more about how we can help them deliver their strategy in challenging times. No matter whether they are MVNOs, sub brands, or digital brands they all want to remain adaptable and maintain speed to market. It’s provoked some interesting conversations on the role technology can play in shaping propositions. 

In terms of the big themes: 

  1. Most accept that past recessions can’t be used as a barometer of what will happen this time, simply because inflation will play such a large role in economic dynamics. 
  2. Few operators will be ready to absorb the spike in network costs related to energy, labour, and equipment. (See my comment in Mobile Europe earlier this month)
  3. This has led to the realisation that MVNOs and digital brands are in a stronger position than operators. 
  4. The small print in mobile contracts could catch many consumers out – an inflation linked price rise could see some people pay significantly more. This could prompt higher levels of churn, something aggressive players can capitalise on. 
  5. Mobiles are considered essential, but people are making tougher choices in light of fuel and food inflation. Not everyone will have the luxury of shopping around for a new deal – MVNOs can find a ‘sweet spot’ here. 
  6. There’s some talk that it might damage 5G growth, or at least the purchase of 5G handsets as people explore refurbs or delay changing their handset. 
  7. Unanimous acceptance that attempts of fraud are going to spike. Sadly, it’s a case of desperate times, desperate measures.


In terms of market response, what do I think we can expect?

  1. MVNOs will see this as an excellent opportunity to grow, just as they did during Covid-19, but their pricing strategy has to be right.
  2. We could see the more ambitious MVNOs capitalise on their financial position with aggressive advertising about holding prices.
  3. Plans that offer more flexibility and value will be favoured by consumers. Data or minute roll overs, sharing unused data with family and friends, cash back and roam like home price promises will all appeal.
  4. This could lead to some interesting innovation as MVNOs test the water on more daring plans that meet the needs of budget conscious consumers.
  5. Rewarding loyalty will be vital in helping improve the perceived value of a plan. Getting new schemes into market quickly will pay dividends.
  6. Managing the risk to 5G growth could prompt the launch of highly competitive offers. 


Who do I think will win?

  1. Those with cash reserves are obviously in a better position.
  2. But it will take more than cash. The MVNOs with agile operating models will be able to track and respond to the market changes ahead of competitors.
  3. Operators who have already partnered with next generation digital billing solutions have access to innovation and agility, allowing them to react quickly to new market demands and trends. There’s now an appetite from those yet to invest to make the leap - it’s the only way to innovate and grow in a pressurised market. 
  4. Operators focused on using data analysis to inform decisions will do well. But models need to be adjusted to spot churn sooner in the cycle, and determine what intervention to take, when.
  5. Similarly, the operators who keep a closer eye on revenue leakage will strengthen their position. It’s clear that fraud detection models must be robust and automated to manage the expected volume of attempts.
  6. Digital customer journeys, including eSIM, will become more important for managing costs, but they mustn’t compromise the experience or damage the perception of the brand. The providers that have quick and easy to use self-service checkout, activation, account management and help models will be the most successful in reducing overheads and protecting NPS
  7. Perhaps one of the most important conclusions customers are making is that they must review their digital strategy. The cloud and applications can’t be ignored anymore. It will facilitate cost reduction and agility in volatile markets. You must have a digital strategy that can cope, adapt, and scale. Read our blog post on the five benefits of a digital-first strategy. 


In conclusion, be ready

From my perspective, there is an infectious air of optimism. Disruptive leaders know they can gain in this market, and even if they haven’t got digital at the centre of their plans, they know that it isn’t too late. By taking the time to get the infrastructure in place now, they will be able to spin up new products and services to seize market opportunities as they arise. The market will be changeable, so being ready is going to be the name of the game.

MDS Global can help you to understand how your technology roadmap must adjust and evolve to meet and exceed customer expectations in the year ahead. Contact us to learn more.