.png)
Scroll to top
Launching a Mobile Virtual Network Operator (MVNO) can be a daunting task. Competition is fierce, margins can be tight, and the market is ever-changing.
But, with the expansion of 5G coverage, and increasing eSIM availability, it’s now easier than ever for Australians to switch away from the major networks. Moving to a better value, lower cost provider can be as simple as a few clicks. That’s good news for ambitious challengers.
There has never been a better time to start an MVNO in Australia.
.png)
Unlike Australia’s big Mobile Network Operators (MNOs) – Telstra, Optus, and Vodafone – MVNOs can’t be run as mass market businesses. The key to success is to niche down.
The MVNO model is not a scale game, it is a niche game. MVNOs exist to serve and retain a specific customer niche, and to do so at lower cost than the big mobile providers.
MVNOs can offer lower their prices because they ‘piggyback’ on mobile networks, which gives them a low-cost, asset-light operating model. They can be profitable without needing mass-market scale.
Moreover, by serving a smaller group of customers operational overheads are lower too. MVNOs need fewer staff. Plus, with MVNO software they can automate back-office operations like porting, billing, and customer management.
If you’re planning to build an MVNO business, it is important to know where to play (your market niche) and how to win (your value proposition).
To help kick-start your research, we have identified five of the most common market niches for MVNOs in Australia. These are set out in the chart below:
.png)
Let’s explore each of these niches in turn...
In Australia, as with elsewhere in the world, the ‘discount MVNO’ segment is the most competitive. Discount MVNOs offer mobile services at a lower cost than major networks, with the intention of appealing to price conscious customers.
Competitive advantage:
Discount mobile services are always popular. Everybody loves a bargain. Consumers regularly seek out the best deals, and great offers get shared widely (free marketing).
Price-conscious consumers are often happy to accept ‘no frills’ services. Such as lower data inclusions, limited customer support, caps on 5G, or restricted international calling and roaming. This means that discount services can be delivered at a lower cost – undercutting the major mobile networks.
Looking ahead, demand for discount MVNOs is likely to increase. Cost-of-living pressures are already driving consumers to hold onto their handsets for longer and seek out better deals.
By contrast, the major mobile networks have raised their prices – presenting a prime opportunity for cut-price mobile providers to win new customers.
Recommended for:
Discount MVNOs need to operate with minimal staff and systems. Generally, this approach will suit new startups, or established low-cost operators.
Many discount MVNOs use mobile enablement software to automate ‘busywork’ that comes with activating SIMs, issuing invoices, and managing customer accounts. This automation, in conjunction with low OPEX, ensures that can run lean – despite thin margins.
Consumer retail MVNOs leverage the positive reputation of a company to create a feeling of loyalty and trust among customers. Australian examples include e-commerce retailer Kogan and supermarket chain Woolworths (Everyday Mobile).
But it’s not discount retailers and grocery chains launching MVNOs. Utility companies such as AGL, are adding mobile and data services to their product portfolio. And device manufacturers, such as Spacetalk smart watches, also provide their own mobile data plans.
Competitive advantage:
Consumer retail brands have two special advantages when it comes to MVNO.
First, they have huge customer databases which can be used for targeted marketing. Consumer brands such as Aldi have been very effective at converting existing customers into mobile subscribers.
The second advantage is commercial flexibility. Consumer brands can use their branded mobile services to generate customer loyalty – not just direct revenue. With a little creative thinking, brands can create a truly unique mobile subscriber experience.
Woolworths, for example, offers grocery and liquor discounts to their mobile subscribers, as part of their broader Everyday Rewards program. Not only does this subscription revenue grow their bottom line, but it also incentivises customers to return to their stores every week.
Recommended for:
Almost any established retail brand can launch a consumer retail MVNO. The heart of this business model is a trusted, recognisable name and a large customer database.
MVNOs tend to suit well-known retail brands that wish to extend beyond their core market. However, successful MVNOs have been launched, by sporting clubs and even religious communities.
Retail brands are often wary about having to build MVNO systems and processes from scratch. One shortcut to success is to select a turnkey software platform. This way, retail brands can simply adopt a compliant, proven platform and start selling sooner.
MVNOs are growing in popularity among small and medium businesses (SMBs). In response, many IT and Managed Service Providers are launching their own mobile products.
By focusing on business customers, MVNOs can reach a large, high-spending market that is increasingly keen to switch from the major telcos.
Competitive advantage:
Business mobile providers combine the ease and value of a retail MVNO, with inclusions and expertise tailored to commercial users.
One of the most popular business mobile features is data pooling. This allows a business to pay for a single large amount of data and share that data across dozens – even hundreds – of devices. Many businesses find this ‘data pooling’ approach is better value, and simpler to manage.
Additionally, many business IT providers can offer a more expert level of technical support. This is an important differentiator vs the major networks. Businesses customers place a high value on getting fast, knowledgeable help with any issues that may arise. Mobile services are no exception.
Recommended for:
Mobile services are a natural value-add for almost any kind of business technology provider. There is no requirement to be an established telco.
Suitable businesses include: Managed Service Providers, System Integrators, PBX installers, Print & Fax providers, even business IT consultants.
Telecom value seekers want the convenience (and value) of a single provider for their broadband, mobile and home phone services.
Australians have a wide range of internet service providers (ISPs) to choose from, and many also offer MVNO mobile plans. Examples include Mate, Tangerine Telecom and Superloop.
Competitive advantage:
ISPs and nbn™ resellers can tap into their existing customer base to drive efficient growth, especially through cross-subsidisation. One of the most common approaches is to offer a multi-service package, combining discounted nbn™ or phone services with mobile.
Mobile and internet bundles give customers lower costs and the simplicity of a single provider.
Recommended for:
In Australia, challenger ISPs have been increasingly successful in taking market share away from the major telco networks. The addition of mobile is another string in their bow.
The combination of mobile and internet makes sense for a wide variety of telecom businesses. Such as nbn™ resellers, private data networks, satellite networks and telecom channel partners.
Lifestyle & purpose-led consumers
Lifestyle MVNOs are a unique type of mobile service provider that target specific demographics and offer tailored services and experiences.
By offering tailored services and experiences, lifestyle MVNOs can meet the needs of their target market better than the big telcos. Making them the best (or only) option for their market niche.
Lifestyle MVNOs win by establishing an emotional connection to their market, and then build customer trust over time. In recent years, Australian MVNOs have been successful at innovating and tailoring their products to serve these lifestyle niches.
Seniors & Retirees
Big Purple Phone is an Australian MVNO that serves the senior’s market. They offer their mobile plans alongside a specialised mobile handset designed for users with limited tech skills and poor vision. Both plans and device are tailored to fit their market.
Youth & Millennials
Another example is Boost Mobile, an MVNO targeting Australian youth. Boost Mobile plans are pre-paid and offer large data inclusions, matching how their target demographic prefers to consume. Plus, they offer youth-focused content related to Music Festivals and Motorsports.
Social impact & sustainability
Additionally, there are lifestyle MVNOs that are focused on social good, such as providing carbon neutral service, donating a portion of their profits to charity, and helping to bridge the digital divide in regional Australian communities.
Recommended for:
Lifestyle MVNOs are unique because they are built around a shared interest or purpose. Customers sign up for emotional reasons, not simply price or service.
Any business can launch a lifestyle MVNO provided it has a credible connection to its chosen market niche. Purpose-led businesses are likely to find a receptive market. In addition, businesses with a large database of seniors or youth.
MVNO is a niche game, not a scale game. Launching a successful MVNO means identifying the niche that fits your business best; and delivering the right services at the right price.
By tapping into a market niche - through lifestyle, discounting or brand affinity – prospective MVNOs can quickly build into strong and sustainable businesses.
But you can’t go at it alone. You need a wholesale mobile partner that can support your vision and enable your growth. That’s where Telcoinabox comes in.
Telcoinabox makes it easy to design, launch, manage and bill your very own branded communication products. We take away the high costs and complexities of running a telco. We provide the know-how, and software platform, so that you can focus on winning customers.
Our MVNO enablement software allows any business to launch and scale as a Mobile Virtual Network Operator. We are the trusted name behind many of Australia’s most successful MVNOs.
By using our MVNO software for business automation, mobile providers can play to their strength as lean, low-cost operators – without technical or network distractions.
The platform provides turnkey access to wholesale mobile plans, powerful service management tools and key compliance features. This means that your day-to-day activities, like number porting, SIM activation and service management, can be completed in a few clicks.
Telcoinabox gives you everything you need to start and succeed as an Australian MVNO.
