Any thing from £25.000 to one million pounds
Ben Oakford • Setting up an MVNO is very expensive, simply because you have to negotiate deals with the MNO, as well as having a seperate budget for your marketing and distribution. Another key note to remember is that you need to have a well thought out business plan in mind before you approach the market, with the type of MVNO that you want to be, i.e a thick MVNO, thin MVNO, or an ESP, in mind. If you do not do this then you will find yourself in a precarious position.
Kevin Stanfield • I don’t think there is a simple answer to this question Micheal, it may be that you have to re-phrase your question – Are you asking what is the cheapest way to enter the market, what are the total cost of ownership considerations, are there advantages of cap ex v op ex models? Some other considerations are whether you are looking for a full or light MVNO (and all the other models in between), are you selling to an exisitng cusomer base or looking to create one, do you have a unique selling point or are you trying to compete on price?
Nikolaj Grubert • Kevin is right. Are you setting up a full MVNO then we are talking millions. Are you thinking about the branded reseller way, then a fraction of that, but again then yoshouldld have a clear segment, and preferably a customer base already. No matter what you choose, you will need a good business plan and independadvisor’ssors (legal, marketing/strategy etc)
Carlos Jordan • In my opinion you must look at three main axes to evaluate the overall investment required to lauch an MVNO activity :
- First the model you want to adopt and the required technical architecture. From Brand resaler to Service Provider to Light MVNO to Full MVNO… seems simple choice but is far more complicated than that.
- Second one is your market positionning : From niche to low cost voice only, mass market, no frills, diaspora based, banking specialist… There is again a wide range of choice in terms of target and value approach.
- The third one is your current activity and the synergies your can get with. Do you have any IT skills and equipments (billing platform, customer care…) you can integrate with your new activity. Do you plan to use your distribution network, do you have any brand awareness or a current customer base…
What is for sure is that MNOs will ask you at least :
- Set up fee – upfront payment (varies according to negotiation power you have and the position of the MNO in the market.
- A minimum of revenues per year for the MNO.
- Of course, wholesale traffic purchase agreement
- Sometimes a sort of numbering rental (per declared active SIM card) to avoid you from account non active users.
Anyway the alternative to agree with an MVNE/A could be interesting for your company but the changes with the country. ie In the UK, in some occssions, operators are already working directly with MVNEs that the resale to MVNOs. In France for instance operators prefer to sign deals with MVNOs even though the outsource the technical layer to MVNEs.
Daily Telecom : MVNO focused on chinise inmigrants in Italy (hosted by Vodafone) 200 000 users and only 2 people as staff Using Internet only for distribution. I have no idea of the wholesale agreeement they have with Vodafone but I’m sure is very attractive becouse of the real complentarity they bring to Vodafone.
Virgin Mobile in France (~1.5M users) The CAPEX of the migration into Full MVNO configuration was estimated to 20 M €…
Joerg von Brandis • Hello Michael. consider this way:
What is the MvNO for? For voice, for data, for telematics? For a closed user-group or public? Is it for large businesses demanding high quality or for mass markets?
With our international MvNO/E concept we are not bound to a single MNO but utilise all alike. That has impact on quality & performance. Autonomy from one carrier only grants best possible investment & service security. The full spectrum – voice – data – telematics – allows each strategy with mobile networks.
Indeed is the price-range not communicable, too many basics are missing in this request. It can start from EUR 150 K and can reach EUR 1.5 M or more.
Julio F. Castro Cabezas • Good points Carlos. Is there somebody out there who knows why Virgin spent so much money in France? Looking at the price-points in the industry this deal seems to be way-off scale. Working in JSC Ingenium as full MVNO solution providers, the figures mentioned seem to be blown-up, unless they bought some prime-location for housing and just put it as part of the capital expenditure, along with 1 or 2 Picasso´s! So, just curious to hear the gossip around that “striking” deal!
Helmut W. Lehner • Julio, 20 Million is a lot of money, but a real full MVNO (and full MVNO can mean a lot) has a lot to purchase: Just count them: Media Gateway, MSC, HLR, STP, SGSN, GGSN, MNP Solution, IN, Billing, Provisioning, IVR, SMSC, MMSC, Browsing Gateway, Device Management Solution, IP Backbone, Firewalls, Load-balancers, DWH, CRM, Self Service Portal, Web – Shop, Logistic Solution, ERP, Top Up Solution, Network Management Solution, Customer Experience Solution, …. and many more. It is like a MNO Greenfield operator without Radio Network. Many parts are IT solutions and delivered by IT companies and not by TELCO Suppliers. It is always more then everybody expects.
But it is really up to the business plan, if a full MVNO makes sense or not. The investments need to follow a business plan. There are no natural reasons to be a full MVNO but there are also some good reason to be a full MVNO and to spend even 20 millions. As an example, they will go for a LTE license in a second step.
Again a MVNO can cost from very little to many millions.
Julio F. Castro Cabezas • Hello Helmut, Than you for your views.
We have delivered a number of full-MVNOs ourselves (full=core+IT+BSS+…). We are providers and have developed our own solutions. Please note that this is not a sales-talk as I am aware of some of our colleagues in the competition that would also be surprised of such a price-tag. There are a number of things in your list that I would not expect a full MVNO to buy. I am sure that you are not suggesting for a full MVNO to dig around France to set-up a IP-Backbone 🙂 The market is mature enough to get really good prices, and therefore the MVNO can just hire it as a service. That applies to some other elements you mention.
I think my real remark is: if the MVNO wants to go full to have maximum flexibility, but follows a traditional approach to building up a network, well…tough job to compete with the incumbents. There are a number of companies out there that can provide very cost-effective, innovative solutions, at considerable lower cost.
Ori Bar • Honestly speaking, the path you have to follow is pretty structured:
1. Validate your business case(target customers, growth scenarios, competition, differentiators, WS cost to the MNO, expected ARPU, expected CAPEX and OPEX and so on). This step can be a pretty good go/no go indication…
2. Define the blue print/high level architecture of your solution – this will be required in order to get your systems in place.
3. Find a vendor that can support your growth(e.g. via Pay as your grow – allowing you to minimize your investment in the first phase, where you have almost no subscribers and therefore almost no revenue). Do remember to look at references…
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