Thank you to Telstra for inviting me here
all the way from London to present.
I had a good time to catch up with so many movies I haven't seen
during my 23-hour flight.
So...it was great.
But it's even better to catch up with
a captive crowd of experts in the MVNO market,
in a market that itself is fairly developed by global standards.
So, let's start. (CLEARS THROAT)
Let's have a look at some of the global MVNO trends.
I will not go through my agenda again,
because I think Len has already introduced it.
But, briefly, we're going to look at the global MVNO market developments,
especially with reference of numbers.
I know everybody's always keen to understand and quantify
their business opportunity.
We'll have a look at what the Australian market is like.
This was a missing bit.
We have a look at product expansion,
emerging MVNO models,
and we try and have some conclusions for you
in order to decide what to do next.
So, the global MVNO market
has been growing very steadily.
It keeps on growing.
We are forecasting growth still.
We are talking about a market
that today is just a bit shy of 3% of the global market.
It will grow to past or approaching 4% in the next five years.
The interesting aspect about the MVNO,
specifically in relation to the global mobile market,
is that the pace of growth of the MVNO in terms of subscriptions
is faster than the one of the overall market.
So, we are talking about a segment that is obviously a niche segment
but is a segment that is catching up.
A segment that is growing in importance
with reference to the rest of the market.
Clearly, it looks very tiny here.
We're only talking about 2.5%, 3%.
But let's remember that the MVNOs are not there everywhere.
In the world there are only about 75 markets that have MVNO presence.
The rest of the world, of the mobile world,
doesn't even know how to spell MVNO, but it's getting there.
Australia is a very developed market in percentage terms of penetration.
We are seeing it roughly around 9% of the market today.
And it's growing another couple of percentage points
in the next five years.
So, where is the market growing?
The market is growing in the...
Or at least the expectation of the experts,
we run interviews with professionals, MVNO professionals,
and we ask them,
"Where do you expect the next phase of growth to come from?"
We run this survey every couple of years, obviously.
It doesn't change that rapidly.
But, surprise, surprise, the usual suspects are still there.
The ethnic segment, still strong and growing,
the retailers, the big supermarkets, they are still strong and growing.
The youth and community-based approach
is still one of the favourite of the MVNO new business development plans.
At the same time, there are other segments that are still tiny today
and will gain their fair share of the market in future.
We are talking about small and medium enterprise focused MVNOs,
we are talking about FMC,
we are talking about M2M market.
Tiny, but they will grow and reach a share that is probably equal
to today's consumer share in the MVNO market.
So, this is the direction of the market.
But today, which one are the global leaders?
The usual suspects, the usual names,
for the largest ones.
But there are some emerging companies...
If I did this chart a year ago,
some of these names would not be there.
So this market does have the usual suspects -
we are talking about TracFone, the largest MVNO in the world.
25 million, part of the America Movil group.
Focused on a single market.
The Virgin Mobile group.
Very diverse in every single market,
but when you put it all together it's a very, very large operation
across 14 markets.
Lyca Mobile, Tesco Mobile...which is a very interesting one as well.
Lebara Mobile.
I know probably they are exiting the Australian market,
but they are still a large group nonetheless.
Poste Mobile is less known internationally,
focusing on the Italian market only.
Very strong post office retailer
integrating financial services into their MVNO offering.
Very good example of strong single-market player.
Snail Mobile.
Yesterday we were talking about it.
It's funny, the name 'snail' - it doesn't inspire the speed.
Nonetheless, they are quite good at what they do.
We'll see the case study with Snail Mobile later.
And finally Drillisch Mobile,
a German MVNO that is benefitting from the consolidation
of the German market.
Is growing very rapidly
and has very nice, interesting new business models.
When we talk about the MVNO market, let's have a step back.
MVNO market exists in a market that is retail dominated.
That goes without saying.
The retail market is becoming increasingly complex
and increasingly interdependent.
We've heard it already this morning.
The reality is that in the future we are no longer going to see...
In the long-term future, single mobile players,
single fixed-line players, single TV players,
operating in one single segment.
The movement in these markets are becoming massive
and increasingly more complex.
Of course, the online players - whatever 'online' means -
I like to talk about online rather than OTT, which is a bit derogatory,
but online players are entering every aspect of the market.
And I guess what this means for MVNOs,
MVNOs that are working in the mobile only,
they need to see their future expanding in different segment,
different offering,
which are no longer going to be just and only mobile.
Quick look, in fact, what do consumer want and who they buy from?
We run an interesting exercise asking consumers,
"In future, who do you trust to be your mobile suppliers?"
And we listed every single reputable company in the market,
including banks, governments, financial institutions,
internet companies, device retailers and so on and so forth.
When we grouped all together
those that are not today's main telecom brands,
in some markets the new brands, in terms of consumer trust,
are overtaking the established brands.
Obviously, it doesn't wash down very well with incumbent operators,
or mobile operators in general,
but it's really important to take into consideration.
Customers are ready to buy from other brands
other than the primary mobile telephony brands.
In terms of how traffic is shaping, let's have a look globally
and have a reflection on the Australian market.
The Australian market, the way we see it when we interview consumers,
is very much focused still on customers
who prefer to rely on their wi-fi, rather than their mobile,
for a number of applications.
I think that is a very good opportunity to turn this back
and give some customers peace of mind about using mobile.
The fact that there are so many different applications
that have the primary usage still wi-fi,
means that a segmented approach, maybe an app-based pricing,
does offer opportunities to differentiate the data offering
for MVNOs in Australia.
I have a number of case studies.
I don't want to go into details about every single one of those.
But I want to highlight the most interesting aspects
of each one of those,
and why we see the infancy of a big change happening.
Ethnic players, traditionally specialising
in the international calling market,
are now changing radically their positioning into the market.
They are starting to offer services that are TV services,
they are starting to offer services that's money transfer,
and remittance.
They have started to offer OTT communication services.
The ethnic segment is probably the most interesting one,
because it has a very defined customer base,
and this customer base has a specific way of doing many things,
not just telephony.
You can think about insurance, you can think about travelling,
you can think about eating,
you can think about many, many, many other aspects.
And here those consumer behaviours will offer opportunity
for the ethnic players to rejuvenate their offering.
When we look internationally,
another example that we particularly like,
this is Virgin Mobile Mexico.
The reason I put these guys on the spotlight
is because I like the fact that
within a few weeks of Pokemon launching Pokemon GO
they already had an app-based pricing
that was specifically targeting the Pokemon GO users.
This happened in less than five weeks,
which is quite extraordinary,
and makes you think what capabilities are there,
underneath their IT systems.
The other example I want to use as how the market is changing
and where it's evolving is Giffgaff.
I don't want to talk too much about Giffgaff,
because everybody knows something about Giffgaff,
but what I tend to love about the way they go about it,
this is a completely digitalised business.
This is a business that offers in every single touch point
a self-care and a digitalised experience.
Whether it is recruiting new member,
whether it is offering customer support,
whether it is checking the balance, the usage, and so on and so forth.
This is probably the most digital example of MVNO I can think about.
Next one - iD mobile.
Very recent British MVNO.
What I like about what they're doing
is the way they focus on the customer pain-points.
They really think about personalisation of the tariff plans.
They identified three main pain-points in the British market,
which is the data usage and what comes with it,
which is guaranteeing a certain level of spending.
They identified the roaming, they identified the data rollover.
Those are still pain-points in a market that is spoiled for choice.
And they have been very successful so far.
Again, when you look at these three different price plans, personalised,
think about what kind of capabilities they need to have
in their systems in order to be able to offer this type of offering.
Google Fi.
Google Project Fi is interesting
mainly because it has grabbed the attention of
many of us in the industry.
So far, not extremely successful.
I think one of the key learnings I would always remind Google of is,
you're trying to sell technology.
People want to buy simplicity and peace of mind.
Think back a little bit,
I think this technology is very, very promising.
Probably customers are not yet there to buy technology.
But it's something that will give us a bit more food for thought
in the coming months.
Snail Mobile, I mentioned at the start,
is another really interesting example
of MVNO development internationally.
It's China's most successful MVNO.
I like the fact they're focusing very much on the core business,
which is the mobile gaming business.
They introduce...obviously they don't try and target
the price-sensitive market necessarily.
They go after the gamers with a 3-D gaming smartphone,
which is extremely interesting.
What I like about what they're doing is that they're able to
zero-rate the application store and the gaming store.
So they make it easier for the underlying business
to monetise the mobile users,
rather than monetising directly the end users
by charging for mobile traffic.
And finally, a couple of other very recent MVNOs.
Bayern Munich Football Club.
Very interesting. They are offering...
This is an extremely recent one supported by Deutsche Telekom.
They are offering the club members some benefits
including taking pictures with the football players,
listening to the post-match commentary, and so on and so forth.
I really, really like that example
because they really understand the niche of the market,
and they are not focusing on the typical price discount.
They really go after community and the experience.
Very nice example.
And then another trend that we are seeing is multi-brands.
MVNOs are able to tap into multiple brands at the moment in one go.
This was launched less than a month ago.
It's the same company.
At the same time they launched two MVNOs,
platform underlying infrastructure, MVNE and operator is the same.
But they go to market with two brands at the same time.
One is a brand that takes the name of a magazine.
The other is the brand that takes the name of the newspaper.
So this is an editorial group.
And for each of those, they are able to offer online content
of their respective publications,
one being the magazine and one being the news.
The rates are pretty good,
but it's definitely not on the rates that they're targeting.
This is an Austrian company.
Austria is today one of the most competitive market
in terms of prices.
It's rock-bottom, actually, at the moment.
So those are the traditional MVNOs that are doing something new,
they are doing something interesting,
they are doing something very different.
But if we want to look at what the future of the MVNOs might look like,
I think I like three models.
One is the MVNO as a marketing platform,
one is MVNOs for the SME market,
and one is MVNO for the IoT M2M market.