Mobile Virtual Network Operator (MVNO) Strategy for Carriers and Brands

Mobile Virtual Network Operator, or more simply MVNO. It seems the buzz would have you believe that within a few years we’ll all be carrying Captain Crunch, Corona or Pepsi mobile phones. Maybe we well. Seems kind of fun to me. As our global society continues to be obsessed with promoting the hottest brands on everything we own from our feet to our ears, why not have a branded cell phone that goes beyond just the case! I have two thoughts on this subject. One, I think the carriers need to take control of this more or they’re going to loose out on more revenue then they need to and two, big brand companies out there like Louis Vuitton and Disney could take the experience much further.
Let’s start with the carriers. The infrastructure costs related not only to the networks themselves but also the customer management and billing systems is enormous. It seems a waste to make the MVNO build out this infrastructure or worse yet give up this potential outsourcing revenue to a third party such as Visage Mobile, who will provide these systems for the MVNO to integrate with whatever carrier they’d like. The carriers themselves should setup their systems to be flexible enough to manage these MVNOs and take a large cut of the revenue rather then just the whole sale rates of the network usage. Additionally, economies of scale can be created by leveraging large call centers to support multiple MVNOs keeping the costs down for everyone.
Regarding the MVNO’s themselves I think the big opportunity is integration. Let’s take the Louis Vuitton brand for example. If they were to create an MVNO that was super high end, they could not only drive customers to their stores and product lines, but create a need for increased purchases. For example, if LV setup the service to be high-touch customers would be coming in to their store every time they had a problem or wanted to change their plan. Now, given the market, I’d jack up the price of those cell phones to the point that they were disposable so that when that customer walks in with a problem the store person just gives them a new phone and sends them on their way. Not to mention make sure they have the latest mobile holder that came out this week. Big brands becoming MVNO’s open up lot’s of opportunities to better integrate themselves with their customers. They can immediately increase customer insight on buying habits, etc. by monitoring their calls and or web sites visited from their mobile phone (all in aggregate of course to protect privacy). Additionally, they have a way not to directly contact their customer based on their preferences. For example, Disney could do everything from send SMS coupons for Disney Land to the latest program guide for ABC’s lineup.
I’m still looking forward to Apple coming out with a mobile phone and possibly an MVNO play too, but I’m even more curious about when The Quaker Oats Co. is going to have Captain Crunch cell phones for kids!

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