Business Plan MVNO Project Final Presentation
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Transcript of Business Plan MVNO Project Final Presentation
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MVNO BusinessBusiness Plan
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Agenda• MVNO fundamentals
– About MVNO– Wireless service delivery chain– MVNO Business models– Why MVNO
• Indian market analysis– PEST– Porter five forces
• Analyzing MVNO opportunity in India– Our MVNO business model– Our business strategy– MVNO opportunity framework– MVNO marketing strategy – targeting, positioning– MVNO strategy implementation – price, product,
place and promotion – Financial analysis– MVNO business risks
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MVNO FUNDAMENTALS
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About MVNO
• A MVNO is a type of mobile operator which offers voice and data services without owning any part of the network infrastructure.
• MVNO typically "rent" both the access network and the transport network - the mobile spectrum, from traditional mobile network operators and provide services under their own brand name.
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Wireless service delivery chain
user
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MVNO Business models
MNO MVNO
MVNO
MVNO
MVNE
MNO
MNO
MNO BRANDS
MVNE
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Why MVNO
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Why MVNO
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INDIAN MARKET ANALYSIS
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PEST
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Porter’s 5 forces
Threat from New Entrants: High•Growing subscribers base•Presence of infrastructure• Numerous foreign players are interested to enter. Increase in FDI will allow foreign players
Buyer Power: High•Buyers demanding greater variety at lower prices.
Threat of substitution: Low•No strong demand for fixed line•Little awareness about VOIP applications
Supplier Power: Moderate•Handset suppliers have strong brands e.g. Nokia, Samsung, LG• Large MVNO are able to push cheaper brands
Competitive Rivalry: High•Margins are small around 4%• High competition is driving down voice ARPU.
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ANALYZING MVNO OPPORTUNITY IN
INDIA
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Our MVNO business model
MNO MVNO
MVNO
MVNO
MVNE
MNO
MNO
MNO BRANDS
MVNE
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MVNO Business Strategy
• Low CAPEX and OPEX for first few years.
• Low fixed expense and high variable expenses.
• Align with MVNE for infrastructure needs.
• Buy cheap handsets from supplier such as Olive.
• Sell handset at slightly higher price to cover acquisition cost.
• Prevent cannibalization of MNO customers.
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MVNO opportunity framework
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MVNO Marketing Strategy- targeting
TARGET SEGMENT
MVNO OFFER
Retailer MVNO Low income and credit • Simple prepaid • Focus on voice and SMS
Cable MVNO Mass market (cable households)
• Quadruple play bundle• Focus on convergent offer
3G centric MVNO Heavy users of mobile data
• Voice and data bundles• Focus on premium content (music, gaming, sports, etc)
Music centric MVNO Music fans • Voice and data bundles• Focus on competitive music OTA downloads
Enterprise focussed MVNO
Medium to large enterprise
• Corporate packages• Focus on enterprise applications
Demographic focussed MVNO
Focussing on unique needs of demographic
• Simple flat rate• Simple pricing plans
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MVNO Marketing Strategy
TARGET CUSTOMER
Urban youth: Distinct mobile needs
• More and longer out-bound voice calls
• Big calling circles for both making and receiving calls
• Large users of SMS
• Both the earliest adopters and highest users of value-added services
• Higher usage for both voice and SMS at weekends
• High demand for upgrades
• Price sensitive
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MVNO Marketing Strategy - positioning
PRICE
LOW HIGH
VALUE ADDITIONSNO FRILLS
VALUE ADDITIONSNO FRILLS
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MVNO Marketing Strategy
POSITIONING
VALUE ADDITIONS
• Free in-network calling (CUG)
• Personalized customer care
• QWERTY handset at low prices .
NO FRILLS
• Low prices & basic services
• Simple rate plans.
• Easy to understand
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MVNO Strategy Implementation• FLAT PRICING - 8.9$ (per month)
PrepaidVoice
•First 300 mins in
network outgoing
free.•Free incoming•After 300 mins
call charges 0.025
$/min.•Out of network
call charge – 0.04$•One month
validity
PrepaidData
• Free data plan
up to 100 MB•After 100Mb
0.06$/Mb
Postpaid Voice
•First 300 mins
in network
outgoing free.•Free incoming•After 300 mins
call charges
0.018 $/min.•Out of network
call charge –
0.04$
Postpaid Data
• Free data plan
up to 100 MB•After 100Mb –
0.05$/Mb
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MVNO Marketing Strategy
PRODUCT
Vodafone Campus Pack Talk and SMS @ 0.002$
Buy the Vodafone Campus Pack worth $2.2 with 2 years validity
• Calls to 5 local Vodafone numbers @ 0.002$ / min
• Local SMS @ 0.002$
• Calls to local Vodafone mobile phones @ 0.01$ / min
• Calls to other local mobile phones @ 0.02$ / min
• STD calls @ 0.03$ / min
• Existing Campus Pack subscribers can also opt for the new tariff by doing a recharge of $1
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MVNO Marketing Strategy
PRODUCT
Data plan includes
• Internet for emails, surfing
• Chatting applications within network (CUG).
• SMS
• Campus applications – Calendar application for class and event schedules, announcements
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MVNO Strategy Implementation• PLACE
– Initially the service is rolled out in two Indian metros
• Delhi – Mobile customer base 12 millions
• Mumbai – Mobile customer base 13 millions
– The channels we are going to use for distribution will be:
• Retail stores (Big Bazaar)
• Small shops
• Bank ATM
• Self service through SMS recharging
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MVNO Strategy Implementation• PROMOTION
– Promotion at places where youth shop such as
• Shopping malls
• Movies theater
• School campuses
– Imaginative, eye-catching advertising & PR
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MVNO Financial analysis
• ARPU analysis
Postpaid Voice
Average call rate/min (within 300 mins) = 0.013$
Average call rate/min (after 300 mins) = 0.018$
Assuming that 90% customers stay within 300 mins and 10% customers talk more than 300 mins
Average call rate/min = 0.9*0.013+0.1*0.018=0.0135$
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MVNO Financial analysis
• ARPU analysis
Postpaid Data
Average rate/Mb (within 100 Mb) = 0.033$
Average rate/Mb (after 100 Mb) = 0.05$
Assuming that 95% customers stay within 100Mb limit and 5% customers exceed more than 100 Mb limit
Average $/Mb = 0.95*0.033+0.05*0.05=0.03385$
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MVNO Financial analysis
• ARPU analysis
Prepaid Voice
Average call rate/min (within 300 mins) = 0.013$
Average call rate/min (after 300 mins) = 0.025$
Assuming that 90% customers stay within 300 mins and 10% customers talk more than 300 mins
Average revenue/min = 0.9*0.013+0.1*0.025=0.0142$
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MVNO Financial analysis
• ARPU analysis
Prepaid Data
Average rate/Mb (within 100 Mb) = 0.033$
Average rate/Mb (after 100 Mb) = 0.06$
Assuming that 95% customers stay within 100Mb limit and 5% customers exceed more than 100 Mb limit
Average $/Mb = 0.95*0.033+0.05*0.06=0.03435$
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MVNO Financial analysis
• ARPU analysis (per month)
– Assuming 75% postpaid customers and 25% prepaid customers
ARPU = 0.75*(0.0135*300+0.03385*100) + 0.25*(0.0142*300+0.03435*100)
=7.5$ => 90$ (per year)
VOICE
(Per min)
DATA
(per Mb)
POSTPAID 0.0135$ 0.03385$
PREPAID 0.0142$ 0.03435$
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MVNO Financial analysis
– Other analysis (Click link)
Microsoft Excel Worksheet
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MVNO Financial analysis
Lifetime value
- AC – Acquisition cost – 11.0$
- r – Average retention rate – 93%
- i – Interest rate – 8%
- M – Margin customer generates in year – 26.7$
- LTV = 167$
1
MLTV AC
r i
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MVNO Business Risks
OPERATIONAL RISKS
• Wholesale capacity pricing policy
• Concern about subscriber data
REGULATORY RISKS
• Foreign direct investment in MVNO
• Limits on MNO investing in MVNO
• Tax structure on profits
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MVNO Business Risks
OTHER BUSINESS RISKS
• Mobile number portability
• Higher churn rate -> Higher customer acquisition costs.
• Negotiation with education institutions to offer VAS.
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MVNO Business OpportunitiesFuture business opportunities
• Fully functional MVNO in 5-10 years.
• Provide differentiated mobile value added services (m-VAS)
• Future business opportunities – Enterprise MVNO
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THANK YOU QUESTIONS?