2014
Laktit,S
University of Amsterdam
[
MVNO BUSINESS MODEL OPPURTUNITIES FOR FIXED LINE OPERATORS
]
Telecom is a complex industry which has constantly evolving business models. This research intends to investigate the opportunity for BT, a fixed line provider, to extend its proposition by offering mobile voice communications to her customers. Since BT does not have her own mobile network, the possibilities of partnering with a mobile operator are examined. Therefrom three MVNO business models are formed and weighted according to a specific criterion.
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Master thesis Information Science
Business Information Systems
Sarah Laktit
10419276
BT Global Services
Supervisor: Mr. T. de Wit
Supervisor: Dr. P. Weijland
Faculty of Science
Final version: July 2014
First Examiner: Dr. Peter Weijland
Signature: ……….
Second Examiner: Prof. dr. Tom van Engers
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EXECUTIVE SUMMARY
The telecommunications industry is very complex with a large numbers of players and the market is continuously evolving. BT global is a telecom company which offers fixed line voice and is
experiencing this complexity. They were becoming frequently interrogated for mobile voice requests by their customers, which are globally active enterprises. Therefore BT GS had a need for research in this field, to respond on this mobile demand. The key element of this thesis is to find efficient MVNO business models for BT to cover the mobile voice demand of her customers. This study aims to answer the question which MVNO business models fit the best for BT GS Netherlands to meet the mobile voice demands of her clients. The introduction of new technology and partnering with a MNO or MVNE will affect the business of BT. According to several studies, the existing business models in the telecom industry are still evolving and new business models are needed to deploy technology effectively. Flexibility in technology and business processes remains one of the most important characteristics for MVNOs if they are to remain profitable in this market. The assembled business models can also be very helpful for other fixed voice providers, who are willing to strengthen their voice proposition by offering mobile voice.
Given the purpose of this investigative study, a qualitative research method is justified. The study is conducted through literature review, documents- market- customer- analysis and taking interviews. Finally the results of all these sources are cross-analyzed and were the sources for setting up three business models.
Previous research has proven that parties which are already active in the telecommunications can be very successful in offering also mobile voice. They can have a complete communication portfolio and also protect their fixed voice. Also research shows that many combinations of business models or types of approaches are possible, and that not a dominant model exists. According to the market analysis, MVNOs can have great market share. The worries and concerns about the dangers of extra competition and extreme price competition are unfounded in this study.
Considering BT’s current portfolio, capabilities and requirements we can argue that the most light version of MVNO (model 1) is the best applicable for BT. Due to the fact that BT is willing to
outsource most of the service and basically offer her customers mobile voice under the brand of BT. This model has better controllable risks and a better time-to-market, because the MVNE will be responsible for the major part of the service. Assuming the MVNE is a professional and experienced partner. If BT will arrange the value added services, it will be both costly and time consuming, besides that they don’t have the right resources. However, we have to keep in mind that business models will have to be updated continuously, both in practice and in theory.
Keywords: Telecommunications, MVNO, business models, mobile voice, MVNE, MNO, fixed-mobile integration
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ABBREVIATIONS
A N
ACM Autoriteit Consument en Markt
O ARPU Average Revenues Per
User OPEX OPerational EXpenditure
B P
BT British Telecom PABX/P
BX
Private Automatic Branch eXchange
BT GS British Telecom Global
Services Q
BYOD Bring Your Own Device R
C RFP Request For Proposal
CAPEX CAPital EXpenditure S
D SME Small & Medium Enterprises
E SP Service Provider
ESP Enhanced Service
Provider T
F U
FTSE Financial Times Stock
Exchange Index UC Unified Communications
G V
GTM Global Telecom Market VPN Virtual Private Network
H VoIP Voice over IP
HLR Home Location Register W
I X
IMR International Mobile
Roaming Y
J Z
K L M
MNO Mobile Network Operator
MO Mobile Operator
MVNE Mobile Virtual Network Enabler
MVNO Mobile Virtual Network Operator
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TABLE OF CONTENTS
EXECUTIVE SUMMARY ... 3 ABBREVIATIONS ... 4 TABLE OF CONTENTS ... 5 1. INTRODUCTION ... 81.1 ORGANIZATION AND CONTEXT ... 9
1.2 AIM OF THE RESEARCH ... 9
2. RESEARCH APPROACH ... 11 2.1 RESEARCH QUESTIONS ... 12 2.2 RESEARCH METHODS ... 12 2.3 VALIDITY ... 13 3. LITERATURE REVIEW ... 14 3.1 VALUE CHAIN ... 14
3.2 MOBILE VIRTUAL NETWORK OPERATOR ... 14
3.3 MVNO CHALLENGES ... 16
3.4 RELATION MNO/MVNE/MVNO ... 17
3.5 COMPETITION ... 17
3.6 MOBILE MARKET ... 18
3.7 PREDICTIONS/ FUTURE ... 19
3.8 CONCLUSIONS LITERATURE ANALYSIS ... 20
4. INTERVIEWS ... 20
4.1 PORTFOLIO ... 21
4.2 CUSTOMER ... 22
4.3 MARKET ... 23
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4.5 ENTERPRISE MOBILITY ... 24
4.6 MVNO ... 25
4.7 OTHER OPPORTUNITIES/ OPTIONS ... 25
4.8 CONCLUSION INTERVIEW ANALYSIS ... 26
5. CUSTOMER ANALYSIS... 27 5.1 CUSTOMER SEGMENT ... 27 5.2 CUSTOMER 1 ... 27 5.3 CUSTOMER 2 ... 28 5.4 CUSTOMER 3 ... 29 5.5 ANALYSIS ... 29
5.6 CONCLUSION CUSTOMER ANALYSIS ... 31
6. MARKET ANALYSIS ... 32
6.1 MARKET STRUCTURE ... 32
6.2 MARKET SHARE ... 32
6.3 CONCLUSION MARKET ANALYSIS ... 34
7. CROSS ANALYSIS ... 35 8. BUSINESS MODELS ... 37 8.1VALUE CHAIN ... 37 8.2 THE MODELS ... 38 8.2.1OVERVIEW ... 38 8.2.2MODEL 1 ... 38 8.2.3MODEL 2 ... 39 8.2.4MODEL 3 ... 39 8.3 ASSESSMENT OF MODELS ... 40 8.3.1MODEL 1 ... 40 8.3.2MODEL 2 ... 41 8.3.3MODEL 3 ... 41 8.3.4CONCLUSION ... 41 9. CONCLUSIONS ... 42
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10. DISCUSSION AND FUTURE WORK ... 43
ACKNOWLEDGEMENTS ... 43
REFERENCES ... 44
LITERATURE ... 44
WEB ... 45
APPENDICES ... 46
APPENDIX A. INTERVIEW SUMMARIES ... 46
1. VOICESALESSPECIALIST ... 46
2. PORTFOLIOMANAGERONEVOICENL ... 46
3. HEADOFPRODUCTSERVICESIT ... 47
4. SENIORPRODUCTMANAGER ... 49
5. COUNTRYMANAGERGTMBENELUX ... 51
6. PRODUCTMANAGERVOICEBENELUX ... 52
7. ACCOUNTDIRECTOR ... 55
8. MOBILITYMANAGEREUROPE ... 56
9. MOBILEVIRTUALNETWORKENABLER ... 58
APPENDIX B. SCHEMA INTERVIEW ANALYSIS ... 59
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1. INTRODUCTION
Telecom is a complex industry with a large number of players in the Benelux. The complexity of this industry increases due to high interdependence of the players for business growth and the rapid technological developments. BT global is a telecom company which is experiencing this complexity. Even though fixed line services are the heart of BT global they want to do more in the Benelux nowadays. BT desires to be one of the communications leaders in an increasingly connected world. This can only be achieved by continuously improving their business according to the adaptive world, which will lead to new business models. The last years they are becoming frequently interrogated for mobile voice requests by customers. Since BT’s customers are mostly globally active enterprises there is a strong need for being mobile. It is a fact that users are becoming more mobile (e.g. multiple devices, flexible workplaces).
The mobile market is very competitive and offers of collaboration are usually very complex. Therefore BT GS has a need for research in this field, to create a better future by finding new ways to offer communication. There are several trials to respond to this mobile demand; for instance by partnering with an MNO or MVNE. Given the demand for mobile we have to consider the possibilities to create other combinations. This study aims to answer the question which MVNO business models fit the best for BT GS Netherlands to meet the mobile voice demands of her clients. Based on the opportunities of responding on the mobile demand, it is reflected on which business models fits the best for BT. This research thesis will also help in understanding the existing as well as the merging business models of mobile virtual network operators.
Additionally this study centers the MVNO market in combination with fixed telephony. It intends to prove whether it is an opportunity for BT to partner with an MVNE and to which extent of commercial and technical integration. If BT intends to partner with an MVNE, it should be clear which other relationships should be considered. The introduction of new technology and partnering will affect the business of BT. According to several studies, the existing business models in the telecom industry are still evolving. New business models are needed to deploy technology effectively. Flexibility in technology and business processes remains one of the most important characteristics for MVNOs if they are to remain profitable in this market. However which business model is the best for this market? And more important, which MVNO business model is the most suitable for BT GS?
A qualitative research approach is proposed for this study. In order to fill the research question, the study is conducted through literature review, documents- market- customer- analysis and taking interviews. Finally the results of all these sources are cross-analyzed and were the sources for setting up business models. After investigating the opportunities of mobile for BT, the results were translated into three MVNO business models.
In the following sections the research approach will be discussed, this followed by the literature review and the elaborated interviews. Subsequently the conducted customer and market analysis will be addressed. In the sections followed, the cross analysis and the business models are covered. Finally the conclusions are drawn and the research question will be answered.
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1.1 Organization and context
In the Benelux BT is a leading communications partner for multinational corporations,
government agencies and large demanding local businesses for whom they focus on the entire network and IT solutions. These solutions allow businesses to take giant steps forward by creating new methods to influence the market or their services.
Their solutions can help in improving the operational management or streamline internal and external communications. In the Benelux BT not only provides a comprehensive platform for voice solutions, in recent years they have also invested in their own advanced fiber optic network. BT also faces the challenge of local market leaders in Belgium, the Netherlands and Luxembourg in the field of know-how, local service and quality. In this way they are fighting for a fair market where their customers can choose from a strong offer.
BT has an extensive portfolio in the telecom communications. They provide a broad packet of services and solutions. Figure 1 shows an overview of the portfolio propositions. For this study we focus only on the BT One solutions and specific on One Voice. A couple of aspects are kept unspecified and unnamed, because it is considered as confidential information.
1.2 Aim of the research
The aim of this thesis is to analyze and research the current status of the mobile market, the MVNO business models, present the different views, show the weaknesses compared to the strengths and discuss the successes in contrast to the failures. The target groups of this master thesis are telecom organizations, individuals with an interest in telecom communications and Figure 1 - BT portfolio propositions (Source: BT solutions story, 2013)
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new master students. I assume that readers have basic knowledge of telecommunications and understanding of network organizations.My personal motivation for choosing this topic is because of the dynamic context of this project. The telecom industry was a complete new area for me and I wanted to face new challenges and expand my knowledge on different fields.
There is a durable relation with the master information studies, because of the comprehensive field. It examines the interaction between organizations and their existing systems, with the aim of creating, improving and understanding in this field. For this study not only aspects of
information systems are incorporated, but also the research field of commerce and
communications. The introduction of new technology and partnering will affect the business of BT, were new business models are needed to deploy technology effectively. This fits very well in the information science program, which focuses on understanding the difficulties from the perspective of all the involved participants, and then applying the technologies as needed.
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2. RESEARCH APPROACH
A qualitative research approach is proposed for this study. I used the interactive model of research design of Maxwell to define the structure of the thesis study (Maxwell, 2005). This model has helped in understanding the structure of the study as well as to plan this study and carrying it out. Figure 2 shows the interactive model of the research design for this study. The figure displays the most important relationships among the 5 sections/components of the thesis. Goals Efficient communication and collaboration for clients
New business model
Conceptual framework Business models
Telecom industry
MVNO
Research question
What are the MVNO
business models for BT
GS Benelux to meet
the mobile voice
demand of her clients?
Methods Single case analysis
- Literature study - Interviews
- Customer analysis - Market analysis
Cross case analysis
Validity Triangulation
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2.1 Research questions
In the current situation BT offers fixed telephony, but they are becoming frequently interrogated by customers with combined requests. These combined requests exist of the combination of mobile and fixed telephony. Nowadays BT loses communication to mobile and it is important for them to counter on this demand. This study will mainly focus on three domains, which are; the customer, the portfolio of BT and MVNO´s (Mobile Virtual Network Operators) business models. Additionally this study centers the MVNO market in combination with fixed telephony. It intends to prove whether it is an opportunity for BT to partner with an MVNE and to which extent of commercial and technical integration. If BT intends to partner with an MVNE, it should be clear which other relationships should be considered. The introduction of new technology and partnering will affect the business of BT. New business models are needed to deploy technology effectively. This study aims to answer the following research question:
The research question of this study is specific for BT GS Benelux, although the results of this research can be generalized. This study will be relevant for all telecom providers which focus on corporate customers. The main question can be elaborated on the basis of the following sub-questions:
SQ1: What is BT currently offering and how far does it cover the demands of the customer? SQ2: What are the demands of the customers from BT and is BT willing to fulfill the not covered demands of her customers?
SQ3: How do competitors deal with same mobile demand of the enterprise market? SQ4: What relationships should BT enter in order to meet the demand for mobile? SQ5: What are the requirements of BT about partnering with an MVNE or MNO?
After answering the above sub-question I can continue on translating the results into a business model. Therefore the following sub-question is formulated:
SQ6: What is the best MVNO business model for BT considering their current portfolio, capabilities and requirements?
2.2 Research methods
In order to fill the above research question, a study will be conducted through literature review, customer analysis, market analysis and taking interviews. Given the purpose of this investigative study, a qualitative research method is justified. This approach attends to understand an
organization and provide answers to specific question(s). A systematic literature review seeks to prevent preconceptions in the selecting, locating and analyzing of articles (Maxwell, 2005). Literature review also provides the most recent state of a particular topic. Face to face interviews are within the framework of this study an effective method to obtain rich information.
“What are the MVNO business models for BT GS Benelux to meet the mobile voice demand of her clients?”
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For the analysis of the interviews, digital audio recordings are made of the interview, with the permission of the interviewees, which were later developed into summaries. The process of analyzing the interviews is carried out by closed coding. A list of categories are drawn from the previously conducted literature. The interviewees were pre-selected by the principal of BT. In order to minimize influence by the researcher; a member check is performed afterwards. The interviewees are given the chance to see the summaries and verify. Next to the interviews with employees of BT, interviews are held with an MVNE. Employees from BT GS with the following functions are interviewed: Product Portfolio Manager NL
International Sales Specialist Voice and Video NL
Product Manager BE
Product Manager Unified Communications BE
Mobility manager Europe
Product manager GTM
Account Director
In order to understand the telecom industry, the company BT and its customers, a couple of analysis are conducted (e.g. market – portfolio- and customer analysis). Furthermore, a document analysis is carried out which helped in mapping the current situation. The principal selected a series of reports on the business goals and strategy of BT. Finally the results and the collected data are cross-analyzed. Below, the research methods are addressed for each sub-question. The overview shows how this study is intended to answer the questions:
SQ1: Interviews and customer, portfolio and document analysis. SQ2: Customer and document analysis.
SQ3: Market analysis, literature review and interviews. SQ4: Customer analysis, portfolio analysis and interviews. SQ5: Literature review, market analysis and interviews. SQ6: Literature review, market analysis and interviews.
2.3 Validity
This study is conducted by triangulating a literature study, document analysis and interviews. Triangulation contributes to the validity of the study. I intentionally tried to interview people of BT who have different perspectives and opinions on this topic, to get various inputs. Also there is a line in the research question and the sub-questions. Each sub-question is provided with an explanation about how the question will be answered. This makes the study valid, because the research can be carried out in the same way and using the same methods.
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3. LITERATURE REVIEW
3.1 Value chain
The value chain consists of diverse activities which are required for the transformation of unprocessed to actual products. Mobile Network Operators offer their products and services at each of the several levels of the value chain (Cricelli, Grimaldi, & Ghiron, 2011):
The network infrastructure (network equipment, spectrum, and operations),
The mobile service development and supply (tariffing, billing, and network services and products),
The interface with the end-users (distribution, marketing, and customer care). If MNOs share their mobile service with an MVNO, the contribution on certain levels of the value chain will be shared. The figure below shows the areas were an MVNO can participate in the mobile value chain. The access to the network is exclusively for MNOs.
3.2 Mobile Virtual Network Operator
Mobile Virtual Network Operators (MVNOs) offer mobile voice services to customers by
purchasing capacity or wholesale minutes from a Mobile Network Operator (MNO) and selling it under their own brand (Kalmus & Wiethaus, 2010). This allows MVNOs to avoid owning, operating and investing in their own mobile radio access networks.
There are different types of MVNO’s. They vary from light until full MVNO. We can distinguish a full MVNO from other MVNO models by its ability to function individually of the MNO’s, it is less independent. Talmesio (2013) argues that flexibility in both technology and business processes remains one of the most important characteristics for MVNOs if they are to launch, prosper and remain profitable in these rapidly transforming markets. A critical factor is the focus on costs and the ability to implement changes rapidly. Hosting an MVNO can represent a convenient issue, in terms of incomes received by the MVNO for the utilization of the infrastructure, operational cost reduction, risk sharing, improvement of the network effectiveness and economies of scale (Cricelli et al., 2011).
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There are various types of MVNO business models existing. As shown in figure 4, four main business models can emerge.Figure 4 - Different business models (Source: Valoris Telecom practice, 2008)
A Branded Reseller is lightest MVNO business model, where the venture just provides its brand, while the MNO provides the rest of the service. This model requires the lowest investments for a new venture and therefore the fastest to implement (Camaran & Miguel, 2008).
The Light-MVNO model allows taking some more control than the previous model (e.g. sales and marketing). On the other hand, a Full-MVNO, will have the most extended control on the levels in the mobile value chain. The venture will be far less independent of the MNO, but it requires high investments.
Finally, an MVNE is the most complete model for a new venture. If this venture will operate as an MVNE it will allow other parties to operate as a branded reseller. In this case the MVNE will be the intermediary party between the MNO and future MVNOs/ branded resellers. Basically it is an organization that virtually enables mobile network.
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3.3 MVNO Challenges
Since MVNOs need to understand and respond rapidly to changes in their markets, it is
important that they should be able to implement changes rapidly. It is a fact that they will face both businesses as technical challenges. Informa Telecoms & Media (2013) has noticed that there are nine important specifications for MVNOs to be successful; these are shown in table 1 below. These specifications can be great challenges for new upcoming MVNOs.
Informa Telecoms & Media’s Key stipulations for successful MVNO’s
Brand Existing strong brands that have the potential of expanding their
brands into the mobile business.
Lean cost base The vast majority of MVNOs have low-cost operations (both
capex and opex). Flexibility (commercial
and technical)
Ability to change business agreements and IT network-related adjustments both cost effectively and in a timely fashion.
Differentiation Pricing and CEM represent the most successful ways for MVNOs to innovatively differentiate themselves.
Distribution This is the single most important factor; it is the most common feature of the large and successful MVNOs.
Existing customer base Not all MVNOs have an existing customer base at lauch but the majority of the successful ones have entered the telecoms market by taking advantage of existing customer relations.
Committed management MVNOs often belong to larger non-telecom groups; management buy-in is indispensable for their success given that MVNO is often the non-core, smaller activity.
Access to funding Financial agility is one of the least discussed but most important requirements for MVNO to be able to launch and especially to remain in operation.
Complementarities While MVNOs will always attract some of the customers of their own host operators, complementing the business of the hosting network makes it more possible to start and maintain a mutually supportive business partnership.
Table 1 - Key stipulations for successful MVNOs (Source: Informa Telecom & Media, 2013)
Some of the most important business challenges of existing MVNOs are related to flexibility. According to the study of Talmesio (2013), managing and understanding technology remains one of the fundamental challenges for both new and old MVNOs, especially for those with no telecom background. Other business challenges for MVNO’s that arise from other studies (Camaran & Miguel, 2008) (Garrido & Whalley, 2013) are the price competition, the service diversification, the device management, the contract terms, billing and cash management and the retail, distribution and logistics.
It can take several months to arrange the commercial negotiations between MNO/MVNE and MVNOs, even when the main elements of the agreement are accomplished. According to Talmesio (2013) the most difficult and extensive part of launching an MVNO is related to network and IT integration between the operator and the MVNOs.
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3.4 Relation MNO/MVNE/MVNO
MNOs decide to embrace the wholesale business model basically because they are willing to grow their market share and gain share in the wholesale profits. They like MVNO business because it is profitable and MVNOs help them to reach segments of the market which they cannot profitably serve themselves (Talmesio, 2013). MNOs often choose to embrace MVNO business models in markets where the mobile wholesale business is highly developed, because there is an existing revenue opportunity. However generally speaking, MVNO business
development is tended to be used by operators with a relative minor share of the market. MVNEs are acting as mediators between MNOs and MVNOs, therefore issues related to technology complexity and cost are largely addressed by MVNEs. Although we can also argue that competition between the partners will play a role, if the strategies are not sufficiently divided. As a matter of fact, the incentive for an MVNE to agree voluntarily in hosting an MVNO arises only if both of them can improve their overall profitability. An analysis is required to point out the relationships of ‘‘competition’’ or ‘‘collaboration’’ which the MVNE finds advantageous to establish with the MVNO (Cricelli et al., 2011). When choosing the right infrastructure an MVNO or MVNE need to focus on the complexity and coverage of mobile communications skills that their partner can and will offer. The benefits need to be weighed against the issues of infrastructure and the operators complexity.
The following three primary motivations for mobile operators to allow MVNOs on their networks can be described (Bassayiannis, 2008):
Segmentation driven strategies; MNOs often find it difficult to succeed in all customer segments. MVNOs can help in attacking specific, targeted segments.
Network Utilization driven strategies; An MVNO strategy can generate economies of scale for better network utilization.
Product driven strategies; MVNOs can help MNOs target customers with specialized service requirements and get to customer niches that mobile operators cannot get to. MVNO models mean lower operational costs for mobile operators, grow average revenue per user by providing new applications and tariff plans and also can help with difficult issues like how to deal with fixed-mobile convergence by allowing MVNOs to try experimental projects and applications.
3.5 Competition
The high competitiveness has increased the complexity of tactical relations among operators in the current mobile telecommunication sector. Cricelli et al. (2011) argue that the vertical integration has become anything but a choice and not a compelling technical solution, the contest takes place at different levels of the components of the operator value chain (e.g. the network infrastructure, the service development and the relationship with user). According to Talmesio (2013) the greatest obstacles for MVNO markets have often been the timing, the cost of connecting to a MNO or MNVE and implementing the specifications that are needed to address the market.
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On the one hand, MVNOs have lower costs than MNOs, since they do not have to pay license fees and are only subject to limited infrastructure, commercial and distribution channels costs (Corrocher & Lasio, 2013). However their margins will be lower than MNOs and they will be mainly dependent on the conditions of the negotiated contract. Results of the study ofCorrocher & Lasio (2013) show that the most successful MVNOs are those characterized by the ability to find a perfect match between their core competencies (large network management, strong brand reputation) and the needs of specific segments of demand that had not been previously fulfilled.
Nevertheless several studies (Bassayiannis, 2008) (Corrocher & Lasio, 2013) (Talmesio, 2013) confirm that MVNOs have succeeded in several countries, in taking a sizeable market share from MNOs. Though their revenues will still be limited compared to MNOs, because of they often focus on the markets with the least profitable segments. Also their positioning has an impact and their dependence on the MNOs.
It can be argued that competition in the wholesale market has occurred and MNOs are increasingly interested in hosting MVNOs. The advantages associated with hosting MNVOs outweigh the disadvantages. Hosting MVNOs has become an alternative sales channel for MNOs, helping them to reduce the financial pressures (Garrido & Whalley, 2013).
3.6 Mobile market
Different MVNOs have found success in their own positioning over the globe and especially in Europe. There is no success method existing in the MVNO market. According to Talmesio (2013), retailers and fixed line providers (e.g. Cable operators), account for the bulk of MVNO
subscribers today. The different MVNO positioning has been basically developed by variations in the level of complexity of the service offering and the level of price offered, as shown in figure 5 below.
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The MVNO market is an occasion for telecom, entertainment industry and several otherbusinesses. MVNOs focus mainly on customers, community and content than they do on the technology. This forces them to have offerings focused on specific audiences with a strong customer care element. Whether an MVNO business model is sensible and acceptable to the marketplace is no longer a question. The MVNOs that succeed will do so largely because their network operator partners have incentive to help them (Bassayiannis, 2008).
The main reason behind the fixed–mobile competition is that mobile markets are more
competitive overall than fixed networks and that this competition is constraining market power in fixed network markets. However, the combination of fixed and mobile markets will be more competitive than each is individually (Vogelsang, 2010).
3.7 Predictions/ future
Existing MVNOs are looking to differentiate their services. Alongside the most traditional customer proposition (voice, messaging, data), many existing MVNOs are looking to diversity their business and enter adjacent markets (e.g. entertainment, travel services and financial services) by adding new service bundles (Talmesio, 2013). The strategy from MVNOs and other mobile voice players, of consistently looking for diversity, will always exist.
Telecom operators with no mobile offering can strengthen their value proposition by providing a combined offer of fixed and mobile. A good execution will guarantee a successful performance for the new venture (Camaran & Miguel, 2008). In the future an integrated solution on the infrastructure off both networks could be realized. Besides for strengthen the proposition, the study of Corrocher & Lasio (2013) proves that call prices to the integrated mobile fixed network are more efficient than under separation. Other solution which is high on the list, is the
convergence of wireless telecommunications and the internet. It will provide many exciting possibilities and predictions for the growth of mobile and also in the e-commerce (Barnes, 2007). It is identified that the next few years will be very important in the development of technologies and services that provide truly mobile voice.
Since organizations have rapidly adopted a range of mobile and ubiquitous information
technologies to support instant connectivity, access to corporate infrastructures and for a range of other purposes(Sørensen, 2011). In present and also in the future, much developments and research will be done on how the mobile phone can be used to support work activities. Also on how these broad range and information technologies will be used for the purpose of work and can be merged with the other technologies.
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3.8 Conclusions literature analysis
From the literature study we can state that there are advantages and disadvantages of providing mobile. The table below shows the concluding pros and cons of providing a mobile solution and becoming a mobile virtual network operator or a certain form thereof.
Pros
Cons
More customers can be reached or a market niche which is not yet covered can be satisfied.
The lack of experience in mobile telecommunications sector. Take advantage from its large pre-existent
customer base.
The difficulty in competing with MNOs Take profit from their distribution channels,
brand recognition and customer loyalty. These can be used as launching pads to enter the market.
The uncertainty of the results and risk sharing
Telco know how The risk of high investments on the needed
equipment is a weakness for the MVNOs. Fixed-Mobile convergence Not sufficiently divided strategies could lead
the two partners to struggle for the same subscribers on the basis of retail prices. Which will reducing the profits of MVNE’s and make them competitors.
Strengthen its value proposition providing a combined offer of fixed and mobile
The quality of the network services can be unfortunate. Competition can occur on the available capacity of the network
MVNE acts as mediator between MNO and MVNO, therefore it will handle most of the complexity.
Fewer ability to implement changes rapidly
Table 2- Pros and cons of providing mobile solutions
4. INTERVIEWS
As described in the introduction, interviews were conducted with employees of BT to map the opportunities for mobile proposition and the current situation at BT. In this section the results of the interviews will be addressed. The summaries of the interviews are included in appendix “A. Interview summaries”. On the basis of a number of categories which were drawn from the literature, the summaries of the interviews were analyzed and compared with each other; see the original encoding in Appendix “B. Schema interview analysis”. Before a general overview will be presented, a summary of each interview will be given.
The interviews were conducted with a range of eight employees of BT; there are also held short interviews and a workshop with a Mobile Virtual Network Enabler. On the basis of the
categories, an interview protocol was set up. To ensure the privacy of the interviewees, the people are not identified by name, but only the functions of the interviewees are named. I
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interviewed people with functions as Sales managers, Product managers, Account director, Marketing Specialist, Portfolio managers and Product manager GTM (wholesale). These people were selected by the principal of BT because of their involvement and knowledge on this topic. Most of the interviewees are portfolio or product managers, which have valuable views on adding new products to the portfolio. Because BT is already active with mobile in other countries, I had to interview an employee from Italy.4.1 Portfolio
BT delivers hundreds of services, they have a great portfolio. Simply, they deliver telecom services, which allow communicating trough fixed line. BT offers this service to the employees of enterprises. BT’s portfolio is always distinguished in local and global products.
For BT Benelux, we must make a distinction between NL, BE and Luxembourg, because there are differences. BT has a local network In Netherlands where she can offer business voice on her local network. The local variant consists of products that they completely build their selves, manage it and which the entire product lifecycle belongs to BT. With global products large global teams working on the product, where they build standard packages that can be rolled globally. Since BT is a global player, they can apply lower tariffs for their customers, and manage the global networks themselves. For fixed line they have a global presence, and often have to buy network of other parties, this makes it possible to have cheaper offerings to the customer. BT is recognized in the market, as a brand they were a Telco player. They are very credible on networking and everything what has to do with networking.
All products under BT enterprise are on location and physical, but the cloud BT products are obviously in the cloud. A Private Branch Exchange (PBX) is present at all companies (customers), and BT lays down a physical link with their network. The PBX manages all the numbers and they can all be connected with each other. The one voice service consists of:
Business voice: fixed voice + inbound calls.
VoIP: over IP whereby a central is required.
Global VPN: discounted rates for international calls, make calls and cannot receive calls.
Other services of BT are telecom expense management, which has its value at the time when a company operates in several countries. That service collects all the bills of mobile operators for the customer. These bills are inserted into a reporting tool, and it will search for the most optimal formula and it can determine whether someone has the right bundle. It verifies if the invoice is consistent with the contract and the consumption. Wholesale delivers great networks, which connects intern LAN’s to each other. If a company has several applications in several countries, BT can make a connection between them so that they can communicate. In other countries (Spain, UK and Italy) BT is also offering mobile, all in different ways. The business driver of BT Italy to become an MVNO was that BT couldn’t answer the mobility demands of her customers. BT wanted to provide the customer a complete offer. BT Italy has a leading role in the enterprise market and is totally independent in the management of
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cards, service and offers. Recently BT went from MVNO to Full-MVNO. With the full-MVNO they now have their own mobile infrastructure, and are less dependent on the other provider. They also changed network partner from Vodafone to Telecom Italia. This change is made due to new technology and reduction of costs. Also BT Spain is trying to change provider because of the mentioned reasons.4.2 Customer
The classic styled target customer of BT is a headquarter with branch offices in as many countries as possible, that is the best fit for our portfolio. The intention of the UK principle is that BT addresses as much as possible the multinational firms. The ideal customer for BT has a minimum of 2000 IT users spread over several countries (in Europe and preferably there outside), such clients have to do with user data. Customers who need to work together across the border, which often go traveling and use their mobile. In short, customers who have a worldwide presence and are growing very fast. On the other hand, BT wholesale concentrates on a very different sort of customer, like carriers, re-sellers and cable operators (T-Mobile, Ziggo, and KPN). These are also the parties which we sell network to, but in a re-sell method. Customers are mainly looking for solutions that can help them in saving their costs. They do much more outsourcing, so fewer staff is needed and employed. Main goals of the customers are cost reduction and a better management of the administration. Consumerization of IT also plays a role, people are getting common with the latest technology and it’s good performance. A risk is that the investment will be significant and the complexity and the lack of knowledge.
ACM, who is responsible for the regulations and changes in the telecom branch, can suddenly give a new life to a product, which leads to a change of the customer demands.
BT is definitely experiencing a change in the client demands, especially if we look at the last three years. Customers of BT often have employees with a variety of functions and the organization must be able to provide these people with facilities to improve and facilitate the communication. The customer demands will constantlychangein therequirements, because
thereare alwaysnew trends.
It is spoken by the client on mobile with BT, customers complain that the mobile market is very local; especially the multinational customers have this problem. The customer has a strong demand to the combination of fixed and mobile. BT has to cover the demands of her customers, because BT is losing profit. It is a fact that the customer demands will change constantly; there is a clear demand for mobile.
They want to go from multiple contracts to single contract. It is for them better to have one provider which delivers all the services. There you can see the change, where their customers earlier declined their services separately from a supplier, they had a contract for each location with a particular supplier, for both mobile and fixed. Nowadays this is more consolidated for local and mobile voice. The main demands of the customers are:
Cost reduction.
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Needs a fully managed mobile environment, where all the devices are connected toeach other and it can be used at any place.
Have a contract with a world or European player, setting up a huge contract, which will allow getting a lower price and it creates less difficulty.
Converging of all their devices (his computer, video, fixed line and mobile).
Want to have clearly what to expect when they travel abroad, especially about the roaming charges.
From multiple to single contract.
4.3 Market
The telephony world is evolving. Telecom and IT are merging which is resulting in new ways of voice. The reason for this evolvement is the changing demand of the customer. Unified Communications UC is typically a service which is the result of this group (IT and telecom), an example is Microsoft Lync. Here is everything (e.g. video and screen sharing) brought together to communicate usefully with others online.
Mobile devices are increasingly used in the business world, here and there has been a pioneer with VoIP and there are already a number applications that exist. Sure there is more mobile traffic, but for now, the mobile networks are not of fast speed as Wi-Fi supports, even with 4g this will still be difficult to achieve. Communication is now offered over the internet like WhatsApp, Viber and Skype. These companies have found efficiencies for the users and they have defeated the Telco’s.
Vodafone is the most advanced in the offer of 3G mobile voice services. This is a best practice player. In the current mobile market it is hard to bring new products to the market against the competition. Mobile operators are trying really hard to attract the fixed voice and we as fixed line operators are interested in mobile, so there is definitely a competition. Mobile is now very nationally regulated, in every country there are a number of mobile providers. There are major mobile market players, but the international accessibility is still a difficult issue.
Given the current situation, BT cannot offer cheaper mobile network to its customers than the big players in the market. It is a mass-consumption market, which operates on mass. BT does not focus on the mass-consumption market, but on the international business market. OCTA is the party that has ensured that the telecom market has been deregulated and that other operators also have the possibilities in the market. All market players then get equals
opportunities. The OCTA is now called ACM, they also determine the FTA and MTA costs. The MTA cost should be reduced according to the ACM because they want to help costumers which can’t afford a mobile.
The market in Europe is much smaller which makes the investments difficult. The European Union has focused on the roaming costs, everything is going more and more over IP (voice, video). Three options for IP-based network (local Internet connection, cable at offices, WiFi and 3G/4G). Also at this moment it is not possible to purchase SIM-cards at a local point for all worldwide locations. It is actually a disconnect between the global world and the mobile world. In the past few years a huge boost has taken place, people are massively using business
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applications for personal purposes. The revenues have seen a huge spike but they are also under pressure.4.4 Mobile
The current portfolio is not covering the demands of their customers, they can’t offer mobile at this time. It is clear that BT does not prefer to build her own mobile network; instead they would like an operational model. Mobile is not the core business for BT, but it is a proposition to complete their portfolio. Investing in an own mobile network is absolutely not a good solution, because theprice competitivenessto the outsideworld isamajorweakness, we have to offer a great price.
BT is already active with mobile in countries as Italy and England; these countries could not be compared to the Netherlands and Belgium, because they are bigger. BT Benelux has never been in mobile and its strategy has always been to completely offload mobile. Offloading means that the mobile traffic will be sent through WI-FI and VoIP.
BT needs a mobile proposition in Benelux, because it is very important to protect her fixed voice. BT should offer a complete integrated solution. Important is that it must protect existing
services with the introduction of mobile. When partnering with an MVNE, you will be always dependent on an operator, because all the involved have to make margin from this service. Although there is a disadvantage for the existing service of BT, telecom expense management. With the telecom expense management service, if BT is going to offer mobile they are also going to check their selves which results in lower credibility.
Time to market will be a great challenge for BT; this is a key issue for BT, but there is never blocked time for this. BT can increase its ARPU (Average Revenue Per User), revenues per customer and they can offer something new to attract customers. The advantage of introducing mobile is growth with existing customers, or up-sell. It is less expensive than acquiring new customers. Especially with the internal cost structure that BT has, probably it is going to be very difficult to make margin on this service. On the other hand, we can say that it runs well in other countries in which BT operates with mobile. The advantage is that the provision of fixed and mobile will be done on one invoice.
4.5 Enterprise mobility
BT enterprise mobility is mainly about mobile apps and the security thereof. BT has a mobile application called one voice anywhere; this is a mobile app that allows users to call
internationally cheaper. The traffic is sent via the BT fixed line and will therefore come out cheaper. As a Dutch user abroad will make a call to his home country and in an environment of WIFI (e.g. hotel, restaurant), the traffic on the WI-FI will go through the fixed network of BT. By this we can help companies in the Netherlands to reduce the costs of their international call traffic.
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4.6 MVNO
There are several opinions about becoming an MVNO and partnering with an MVNE. At the end they all suggest that partnering with an MVNE is the only way to go, because otherwise BT has to do huge investments and is in need of many resources.
A couple people don’t see the value of becoming an MVNO, because then they suggest BT will focus on the local market and that is not their customer segment. They don’t think BT can offer cheaper prices than the current players, especially as an MVNO not. Also because they don’t have budget for investments. The requirements of BT to partner with an MVNE are as follows:
Global presence.
Offer phones and SIM-cards, there is a large logistics behind that and it is very complex.
Real time control, recording of SMS/ data/ voice. Although the regulations should be checked.
Have to make a combination of Wi-Fi offloading and mobile voice. Offer our customers efficient communications with cheap prices.
Corporate customers also have a different billing requirement, with different cost groups.
Transparency around the partnering between the MVNE and BT.
Control the SIM swap and migration.
A recognized brand seller and to have a competitive price.
We have to keep in mind that the regulations in Europe will change; the roaming in Europe will be abolished. That may mean that if you're an MVNO in the Netherlands, you're suddenly MVNO in Europe, and that would help BT.
4.7 Other opportunities/ options
There are virtual PBX’s existing which allow to also integrate mobile, this will send the mobile calls through the fixed line. Also IP based there are options. BT prefers to go in the direction of offloading, because everything is going towards IP. If they invest in something, they have to roll out as many Wi-Fi end points and make it in an easy way available for end users. Only then it is possible to look at 3g/4g, to offer internet connection anywhere for each device and for a cheap price.
Other options would be Over The Top, which makes use of 4G connections. The functionality is the same; the customer will only have to make use of the call in a different way. You can think of Skype, with the difference that it is a service purely for the business. This solution has an
international context. A strategy that can be explored is a solution with Pico-cells or Nano-cells. This is a mobile network connection rolled out on the site of the customer and will be only available for that company. When it all lays on the network of BT, the realization of integrating various devices will be easier.
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4.8 Conclusion interview analysis
In appendix “B. Schema interview analysis” the schema with an overview of the summary and coding is addressed. From the interviews I can draw the following conclusions:
The current portfolio is not covering the demand of new customers.
The customers of BT have a great demand for a mobile solution.
Partnering with an MVNE or MNO is the only way to provide mobile at this moment, because BT is not able to invest in an own mobile network.
BT needs to have a mobile product because it is very important to protect her fixed voice.
Services as customer care, SIM distribution and device management should be outsourced.
Therefore we can answer SQ1: “What is BT currently offering and how far does it cover the demands of the customer?” The answer to this question is very clear; BT delivers hundreds of services, they have a great portfolio. They deliver telecom services, which allow communicating trough fixed line. According to the interviewees the current portfolio is not covering the entire demands of their customers. The customer has a strong demand to the combination of fixed and mobile, unfortunately BT does not have the capabilities to offer mobile voice.
We can also give an answer on SQ2: “What are the demands of the customers from BT and is BT willing to fulfill the not covered demands of her customers?” Firstly we have to confirm that BT is willing to cover the demands of her customers. Besides the fact that it will lose profit and lose customers, they must keep abreast of the changing telecom market and, preferably, be ahead of the other market players. The customers have a strong demand for mobile voice and the
following:
Cost reduction.
Converging of all their devices (computer, video, fixed line and mobile). A fully managed mobile environment, where all the devices are connected to each other and it can be used at any place.
From multiple to single contract. Have a contract with a global player.
One invoice for both fixed as mobile voice.
Finally we can draw the following answer for SQ5: “What are the requirements of BT about partnering with an MVNE or MNO?”
Be a recognized brand seller.
Does prefer to partner with an MVNE instead of an MNO.
BT should be able to offer cheap prices to her customers.
Global presence, they are not willing to only focus on the local Dutch market.
The partner should have a total package so that the customer does not have to shop/purchase separately for each country and product.
Support in the migration/ importation process.
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5. CUSTOMER ANALYSIS
In order for a business to be successful, it must be able to demonstrate who will buy their products or services. For this reason we have to define the customer segments, and how the business will meet their specific needs. In this section I will address the analysis that is been done on the customers of BT. First the segmentation of the customer will be described.
Thereafter 3 specific customers of BT will be analyzed, which their names will not be addressed.
5.1 Customer segment
Worldwide, BT Global Services is trusted by thousands of enterprises. From governments, to huge multinationals, to small and medium-sized businesses. Their customers are from several industries, from global financial institutions to local government, pharmacy and energy. BT is supporting more than 170 countries and has the following industry specific solutions:
Consumer Packaged Goods
Global Manufacturing, Global Mining Oil & Gas, Global Logistics, Global Pharmacy Chemistry
Government & Health
Global Banking and Financial Markets
Over 7000 public sector and corporate customers trust BT to deliver critical network and IT services. Their customers over the year (2012/2013) are (Source: BTGS Factpack.pptx):
94% of FTSE (Financial Times Stock Exchange Index) 100 companies
74% of Fortune 500 companies
The world’s top stock exchanges, leading broker dealers and biggest banks
National and local government organizations – and other public sector bodies – in the UK and 16 countries around the world.
Finally we can define BT’s customer as corporates with offices around the globe and corporate travelers. The global offices require a good communication and collaboration connection.
5.2 Customer 1
This customer is a successful European technical service provider, which is composed of several divisions. It has strong market positions in the European construction, industry, infrastructure, ICT and traffic markets and has a total of over 450 offices in Europe. It is, furthermore, one of the top five players in the global marine technology market. This company works in around 25 countries, having a worldwide network of 70 support offices along the major shipping routes throughout practically all continents. Telecom/datacom at this customer is currently contracted through a broad range of suppliers, with only limited shared usage across the divisions/
countries.
They are active in the following countries; the Benelux, Germany, various Central and Eastern European countries (incl. Austria, Switzerland, Poland, Romania, Croatia, Russia and the Czech Republic), the Nordic region (Norway, Sweden, Finland), the UK, Ireland, and Spain. Telecom/
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datacom are currently contracted through a broad range of suppliers, with only limited shared usage across the divisions/countries. When the new vendor offers service(s) in more than one country, they would like to close one international framework contract. The provider is allowed to cooperate with third parties to offer the requested services in countries involved, although it has to make clear which third party offers which service in which country.According to this customer, the provider should agree to cooperate, without additional costs, with the local PABX service partner. Also the provider offers the possibility to configure and manage individual user profiles or group profiles, in which it is possible to route or block traffic or destinations, without additional costs for this feature. Further this customer request
excludes:
• Hardware (e.g. mobile phones, tablets, PBX); • Housing and hosting services (IAAS or TAAS); • Security services (e.g. mobile device management).
Other requirements are that the provider should offer at least one of the requested services in at least one of the complete core countries. Besides that, contracts should be flexible for changes in the infrastructure or in the network governance structure.
5.3 Customer 2
This customer is one’s best number pharmaceutical company in the world. They are a research based, global healthcare company whose mission is to discover, develop, manufacture and market leading prescription medicines for humans and animals, as well as many of the best known consumer products. The short term actions working towards this strategy are to centralize and consolidate the telephony infrastructure and telephony circuits to one or a limited number of carriers. This should help to unify the solution across the globe.
The midterm actions working towards the strategy is to make the voice and telephony service available on any type of device on a single number. This customer is working towards
communications as a service, and wants to go from a Capex model to an Opex model.
The long term strategy for this company is to have a unified communications and collaboration solution (UC) that serves all of its offices globally. The primary goal of unified communications is to improve user productivity and to enhance business processes. The aim is to provide a
seamless and consistent service for all the employees, regardless where they are located in the world. This is separated in:
Voice and Telephony
Conferencing
Messaging
Presence and IM
Clients
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5.4 Customer 3
This customer is a global leader in assurance, tax, transaction and advisory services. Worldwide, 167,000 people are united by their shared values and an unwavering commitment to quality. This customer is seeking qualified respondents with good Mobile and Fixed Line capabilities; pricing; overall support costs; functionality; and implementation timeline. They are looking for a vendor with the required geographical coverage and proven experience with organizations similar to the global professional services network of their company. The main goal of this RFP is to optimize Mobile and Fixed line services in the Netherlands, also considering mobile and fixed integration.
This customer does not have a demand for mobile devices; their intention is to retain the current devices. They indicate to have a strong demand for a dedicated service desk composed of qualified personnel. The service should be available during business hours and reachable through a free number; Service desk members should be familiar with the companies account and must be able to answer queries within the required service levels. The service desk is expected to be contactable for different reasons (e.g. SIM blocking requests, billing and incident management). Also the customer expects monthly reports about traffic volumes, utilization, availability and incidents/SLA performance. Also this customer should be provided with a centralized web based reporting tool which shows and reports the usage.
5.5 Analysis
Considering BT’s focus on multinational enterprises, it seems a logical choice to have a broad portfolio, which covers the demands of their customers. Due to the huge amount of employees and locations these enterprises have, there is a lot of communication and collaboration around the globe. The below analysis is done according to the Request for Proposal’s (RFP’s) that were sent to BT.
C1 C2 C3
Request Fixed Data/ Fixed Voice/ Mobile Voice and Data
Integration of fixed and mobile telephone
Mobile and Fixed Line
Motivation Expiring contracts and intensified cooperation internally across the globe.
Identify an effective, long-term solution for mobile services in Europe
Optimize Mobile and Fixed line services in the
Netherlands, also considering mobile and fixed integration.
Scope 1. Fixed voice (e.g. land lines and voice traffic);
2. Fixed data (e.g. wide area network connectivity and services, as well as Internet connectivity and access); 3. Mobile voice and data.
Fixed voice, Mobile voice or an integrated combination of both.
Vendors may provide an offer for mobile
communications, fixed network communications or a solution for both services.
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Objectives oftender
- Reduction of one-off (non-recurring) cost (NRC), monthly recurring costs (MRC) and usage costs
- Improvement of flexibility in up and down scaling
- Improvement of administration - Improvement of reporting - Improvement of quality of services - Reduction of risks
- Adopt new technologies - Align and integrate with mobility strategy
- Consolidate the supplier baseline and gain: 1) Price transparency 2)Reduce overall cost 3)Usage visibility 4)Reduce amount of circuits 5)Increase synergies 6)Implement efficiencies 7)Increase redundancy 8)Improve central reporting capabilities 9)Consistent SLA across region
- Obtain offers through a competitive process - Cost reduction through competitive tenders and negotiation
- Align contract end dates - Assess the viability of mobile and fixed integration
For countries Worldwide Europe Netherlands
Current situation
Telecom/datacom is currently contracted through a broad range of suppliers, with only limited shared usage across the divisions/countries.
Mobile has a homogenous situation where most of the countries are within the existing infrastructure. They have established central reporting tool, but there are still countries not included.
For fixed line the contractual landscape is heterogeneous. They don’t have a central reporting which could give them an overview of spend and volumes.
Several providers for mobile and fixed.
Fixed data Refers to wide area network connectivity and services, as well as Internet access.
In many countries they will to use the smartphones with the "tethering functionality" (use the smartphone as a WiFi Hotspot).
International roaming
Fixed voice The delivery and/or handling of landlines, voice traffic and value add services (e.g. calamity routing)
International coverage throughout the countries where this company is active
*Ability to optimize and control its use and costs of communications at an international level. *Show the population coverage of 3g/4g in the Netherlands
Mobile voice * Solutions to obtain a convergence between the
* Delivery of mobile hardware
*Able to provide inactive SIMs
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fixed voice networks from thiscompany and the providers’ mobile network.
* Receive user specific notifications that warn when certain predefined levels of usage or costs are exceeded.
*Ensures an outstanding coverage throughout the country for Voice and Data. *Able to provide iVPN (international VPN) which allows lower roaming / international call costs.
* Provide handsets and devices *Ability to deliver international mobile solutions Form of the agreement
Framework contract with the duration of 5 years. Objective is to contract one or more service providers.
A target timeframe of two 2 years, with the option of agreement renewal for increments up to one-year in duration.
Two year term
5.6 Conclusion customer analysis
For all the customers it is important that the provider has relevant experience concerning the services that it will provide/offer. In all cases the customers expect guaranteed network service availability. The main goals of the customers to have a convergence between mobile voice and fixed line are:
To reduce the costs.
From multiple contracts to single contracts.
Improvement of administration, reporting and quality of services.
Improved employees productivity
Improve central reporting capabilities
From the customer analysis we can answer the first part of SQ2: “What are the demands of the customers from BT?” First we can confirm that there is a certain demand for mobile voice communications. Since the customers of BT are mostly corporate travelers, the wish of those frequent travelers is to save on roaming bills. Even though the customer prefers a provider which is active in all the countries they have locations, at this moment it is an unrealistic demand. Thankfully the customer is aware of this situation and indicates to prefer mobile and fixed coverage for at least one certain country. Hence the provider does not have to be active in exact all the countries were the customer operates.
Further the customer has a specific demand for a combined solution of mobile and fixed voice, this allows them to have one provider instead off multiple providers for a country. At this moment the convergence of mobile and fixed voice would be the ideal situation. We can also confirm that there is a certain demand for mobile devices and handsets. Mobile devices are frequently more appointed in the requests.
For the operations, the customer has a demand for a well-organized customer support Centre. These corporate customers have also requests for a reporting tool. They expect that the
provider allows the customer to optimize and control its use and costs of communications at an international level.
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59,1%23,9% 17,0%
MNO's VO's under MNO Independent VO's
6. MARKET ANALYSIS
6.1 Market structure
In the market for telecommunications services and products, there are many parties active in the Netherlands. Since the market is evolving, the roles of telecom providers change
continuously. There are parties that grow, take over other parties and others in contrary limit their activities. In the telecommunications there is a distinction between fixed telephony and mobile. The mobile telephony market structure is different to the fixed telephony market due to the historical evolution of the market as well as the economics of network build (GSMA, 2007). The Netherlands has three main Mobile operators, which are KPN, Vodafone and T-Mobile. In 2013, the existing mobile operators rolled out 4G. Thereby mobile broadband speeded up to 50 Mbps. After the rise of mobile broadband, earlier, it caused a reduction in SMS text messaging. According to ACM, in 2013 and this year, mobile broadband will also influence the voice services (ACM, 2013).
The needs of users play a role as well as the increasing use of services over mobile broadband. This creates a dynamic field in which ACM operates as a supervisor. On the basis of these developments, ACM presents an objective picture of the state of the telecommunications markets. It is a fact that mobile connections is increasing. The number of mobile connections increased by 4% to almost 20 million compared to 2010 (Giessen, Plas, & Ooms, 2012).
6.2 Market share
According to the study of Telecompaper (February 2014), the three biggest mobile operators, KPN, Vodafone and T-Mobile, are slowly losing share to smaller mobile providers. Telecompaper makes this conclusion from the results of the third quarter of 2013. Besides the MNO’s there are a couple of MVNE’s and several MVNO’s active in this market. Figure 4 shows the mobile market share in the Netherlands of MNO’s, VO’s under MNO and independent VO’s. From the chart we can state that VO’s which are partnering with an MNO are stronger on the market then independent VO’s.
