Mobile News

Between 1995 and 1999 a simple operator-customer relationship existed. But now the development of the Mobile Virtual Network Operators (MVNO) and strategic partners such as banks and infomediaries have the potential to change both the value chain and the relationship with the customer. The heavy debts incurred by many European operators as a result of the 3G license bids will induce them to make many more cost/profit sharing partnerships as a means of reducing risk and operational costs. One2One in the UK lost market share to Orange and Vodafone. But it has an additional 670,000 customers on its network as a result of a deal with Virgin Mobile (MVNO). MVNOs with strong brands, such as Virgin, can reach segments that existing operators cannot. MVNOs could launch prepaid services for particular social, economic, gender and ethnic groups.

Operators need to take a holistic approach to prepaid services. No single department can tackle the challenges that are described in this report. Below is a list of all the departments that are required for marketing and managing prepaid mobile services:

- sales and marketing

- finance

- IT

- operations

- billing

- customer care

- logistics and distribution

- retailers.

Operators and investors have relied too heavily on ARPU and subscriber numbers as indicators of success. The level of capital invested in services has traditionally been linked directly to the raw number of subscribers. Investors are now beginning to acknowledge that there is not necessarily a direct correlation between market share and revenue. A prepaid service with a relatively small but loyal and high usage customer base may well yield more revenue than a competitor with a larger, less loyal and lower usage customer base.