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MVNO Marketing Effectiveness
Global Advertising Strategies, April 2005, Pages: 36
This report 'MVNO Marketing Effectiveness' provides marketing strategy and tactics based conclusions for mobile virtual network operators for the next six months.
From this report you will see that over the next six months, the primary objective for MVNOs will be to formulate long-term ambitions with regard to transitioning to facilities-based operations and to decide whether to concentrate on customer acquisition to achieve critical mass or focus on organic growth. According to the study, wireless carriers must also decide whether to attract more MVNOs to their networks or to compete against them in niche market segments. It is thought it will be critical for these decisions to be made now as clear lines will be drawn by the end of 2005 and MVNO-carrier partnerships will be "locked-up" in the next 18 months.
About The Co-Author
I EXECUTIVE SUMMARY, DEFINITION AND METHODOLOGY
I Key Findings -
II Executive Summary -
III Methodology -
1. MVNOS AND WIRELESS SERVICES INDUSTRY
1.1 Introduction -
1.2 Evolution oF MVNO Industry
Figure 1: MVNOs and their suppliers
1.3 Key Industry Drivers -
1.3.1 International call volume and mobile carriers -
Figure 2: Top International call destinations
Figure 3: U.S. Ethnic Groups Corresponding to Key International Destinations
1.4 Approaches to MVNO Marketing -
1.4.1 Marketing strategies
1.4.2 Marketing audience -
1.4.3 Marketing medium -
2. MVNO PROVIDER OPPORTUNITIES AND CHALLENGES
2.1 Strengths and Weaknesses of MVNO Providers -
2.2 Opportunities for MVNO Providers -
2.3 Opportunities for Wireless Carriers
2.4 Market Directions
2.4.1 The next six months
2.4.2 Beyond six months
2.5.1 Perceived threats for MVNO providers
2.5.2 Perceived threats for wireless carriers
2.6 Key Sales Strategies -
Figure 4: Plan Comparison of Major MVNO Players
2.7 Implications for MVNO Providers -
2.8 Implications for Big Five Wireless Carriers
3. COMPETITIVE ASSESSMENTS OF MAJOR MVNO PROVIDERS
3.1 9278 Mobile (low cost international ld)
3.1.4 Strategy -
3.2 7-11 (core brand enhancement) -
3.2.3 Offering -
3.2.4 Strategy -
3.3 Tracfone (low credit customers) -
3.3.3 Offering -
3.4 Virgin (youth market) -
3.4.1 Context -
3.4.3 Offering -
3.5 Qwest (traditional telecom service enhancement)
3.5.3 Offering -
4. COMPETITIVE ASSESSMENTS OF MAJOR WIRELESS CARRIES (MVNO)
4.1 Cingular -
4.1.3 Offering -
4.2 Verizon Wireless -
4.2.3 Offering -
4.3 Sprint PCS
4.3.3 Offering -
4.4 Nextel -
4.4.3 Offering -
4.5 T-Mobile -
4.5.3 Offering -
5. MARKETING CASE STUDY
4.5 Sk Earthlink
4.5.1 Targeted audience
4.5.2 Marketing tactics
4.5.3 Key advertising samples-
The number of competitors in the wireless industry is swelling just as ad budgets are taking a dive. This dynamic is caused by changes in the industry - M&A among tier one carriers and Mobile Virtual Network Operators (MVNOs) fortifying the ranks of tier two players.
MVNOs are a European phenomenon, introduced in the U.S. first by players servicing ethnic communities.
Youths as a target demographic gave MVNOs a high profile, in parts thanks to marketing done by Virgin Mobile. Currently there are over 22 MVNOs in the U.S.
Many industry drivers contributed to MVNO development, the key one being desire by larger wireless carriers to get revenues by selling wholesale access to their networks.
Understandably from where MVNOs are coming from in the U.S., one of the key drivers for their proliferation was competitive differentiator in the arena of international long distance. This doesn’t mean however that top international calling destinations automatically translate into ethnic niches that hold the most MVNO
promise - other factors like global politics are at play here.
MVNO marketing represents a grab bag of various attract tactics, with an occasional co-branding strategy
thrown in. MVNOs target niche markets by definition. Their marketing strategies include traditional channels as well as wireless industry specific, such as kiosks.
MVNOs greatest strength is in being able to identify and address audiences in need of their services. Their greatest weakness is that they lack scale as competitors when compared to large wireless carriers. New entrants into the market, MVNOs are typically first to compete in their specific niche, and thus have the
edge. Going forward, executing on this opportunity will be like hitting a moving target, because while there
will be more MVNOs while the number of wholesalers will decrease because of tier one consolidation.
MVNOs face an increasing threat of competition from new MVNOs and large wireless carriers.
MVNO sales strategies are built almost exclusively around prepaid plans. MVNOs can continue relying on technology for differentiation and expect customers’ demands for quality of services to increase over time.
Competition among the big five wireless carriers for MVNO minutes is expected.
The five groups of MVNOs that are identified are low cost international long distance providers; firms looking to extend core brands; carriers targeting low credit customers; carriers targeting the youths and telecom carriers extending their service offering. The report includes competitive assessments of major
wireless carriers and a marketing profile of SK-EarthLink.
Data for this study have been obtained from various sources, such as regulatory filings of major wireless, players, interviews with company executives, analysis of media types used by these players, and advertising message angles. Descriptive parts of the report contain information from ongoing proprietary research and
market analysis that has been conducted on the telecommunications industry since 1999.
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