By Mato Petrusic, VP EMEA & APAC at iPass
Despite the recent trend of consolidation in the European mobile market, with BT’s £12.5bn acquisition of EE just the latest eye-watering deal, the Mobile Virtual Network Operator (MVNO) remains buoyant. Indeed, there has never been a better time for MVNOs to step in as viable and attractive alternatives to the big mobile operators.
However, MVNOs can’t just expect new customers to come to them. For MVNOs to take a greater share of the market, they have to add real and unique value to their subscribers – despite being under greater financial and operational restrictions than their MNO counterparts. This is no easy task, but offering Wi-Fi services to subscribers can be an incredibly effective means for MVNOs to attract new customers, increase revenue and decrease churn.
So why Wi-Fi? In the 2016 Global State of Mobile Networks report, Wi-Fi emerged as a dominant connection mode worldwide. It was on par with 4G LTE, both in countries where mobile broadband is ubiquitous and in countries where mobile data infrastructure is more limited. For instance, the report estimates that people in the Netherlands spend 75 per cent of their time connected to Wi-Fi. That number is 60 per cent in the UK, a broadly similar figure to Iran and Venezuela, whose citizens also spend more than half of their time on Wi-Fi. This simply confirms what we all know to be true: users are connecting to Wi-Fi in droves, irrespective of geography, making it the preferred connectivity method for most business and consumer applications.
In this climate, MVNOs have a golden opportunity to meet the mobile connectivity needs of their subscribers, who are clamoring for unlimited access to high-quality Wi-Fi. While Wi-Fi at home or work comes as standard, global Wi-Fi access represents a unique value proposition to subscribers. A review of MVNO offerings on the market today shows that Wi-Fi services are widely underutilized and underdeveloped – despite global Wi-Fi being perfectly aligned to the five biggest MVNO pain points and objectives.
- Improve your subscriber’s experience
User experience is the number one priority for all MVNOs and their best means of attracting and retaining customers. Put simply, a great user experience makes for happy and loyal customers. Customer success flourishes when there is a clear return on the time and money invested in a service, and constant service enhancements (such as complimentary Wi-Fi access) create successful subscriber relationships.
By giving subscribers global Wi-Fi services, it means they have access to the fastest and most reliable internet connection whether they’re at home or at work, in a hotel, airport, airplane, restaurant, shopping centre or public venue. Furthermore, by providing them with a seamless Wi-Fi experience, subscribers no longer have to worry about multiple logins and the need to provide credentials every time they access a Wi-Fi hotspot.
- Reduce network costs by offloading data
Fuelled by data-hungry cloud and mobile applications, subscribers are demanding more data than ever, and it’s the mobile operators that bear the cost. By guiding subscribers towards unlimited and unrestricted Wi-Fi connectivity, MVNOs can remove the risks associated with high usage, reduce wholesale costs and regain operational margins.
What’s more, roaming charges form a disproportionately high percentage of most MVNOs’ margins, placing them in a negative bargaining position when negotiating additional agreements to reduce wholesale roaming costs. With changes to the European Union’s roaming rates, MVNOs in that region cannot be certain that the reduction of inter-carrier wholesale rates will be passed on to MVNOs in a timely way.
- Upsell subscribers to higher value plans
In most markets, post-paid users tend to generate higher revenues and to be more loyal, as opposed to prepaid users, who are more likely to churn.
By integrating Wi-Fi connectivity into post-paid contracts, MVNOs can encourage subscriber migration to the higher value option. In a similar vein, adding complimentary Wi-Fi services to a prepaid offering helps improve retention.
- Manage customer churn and revenue decline
Across the industry, the average customer churn rate is 2.5 per cent per month, 30 per cent per year. Regardless of industry, this poses a survival threat to any business.
The two biggest contributing factors to customer churn are poor subscriber experience and low-quality services. We have already established how integrating global Wi-Fi connectivity can help MVNOs enhance and differentiate their core offering, but it also improves “stickiness”. Anytime, anywhere access to Wi-Fi will give subscribers a very compelling reason to stay. This will, in turn, positively impact any MVNO’s revenue numbers.
- Acquire new customers
With churn rates being what they are, in such a tight market, acquiring new customers is essential for all MVNOs, as is winning back old ones. Embedding Wi-Fi services, whether as part of a core offering or as an optional value-added service, is a key competitive differentiator that can help bring in new and old business alike.
It’s rare for businesses to have such a clear picture of what their customers and prospects want but, in the case of Wi-Fi, it’s plain for all to see. Users all over the world are demanding secure, reliable and high-performing internet connectivity, which only Wi-Fi can provide. As the European mobile market becomes even more concentrated, there has never been a better time for MVNOs to act on this knowledge and implement global Wi-Fi solutions, for the benefit of their subscribers and bottom line.
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