Back in 2004, the Belgian operator Mobistar had been looking at a ‘low end’ strategy to acquire new customers. Arkadi Panitch, then Mobistar’s marketing manager, encouraged his company to partner with retail giant Carrefour whose existing ‘No.1’ brand was widely recognised as ‘best for price’.
Carrefour’s large chain of supermarkets would make a natural distribution channel for mobile services, as well as encouraging customer loyalty by letting people top up during their weekly grocery run. It was a good idea, but the process stalled internally.
Trusting our instincts
‘I talked things over with a couple of colleagues,’ says Arkadi. ‘Like me, they were keen to leave the confines of a network operator and test our ideas on the open market. We had a sound business model, lots of potential customers, a clear distribution network—and we understood the technology. We just needed to put the pieces together.’
Founding Effortel allowed the MVNO deal to happen. In February 2006, Effortel launched Carrefour Mobile (originally ‘1 Mobile’) as a joint venture with Carrefour. Its immediate success was largely due to the Effortel technology platform which easily connected retailer and network operator. The process wasn’t all smooth sailing, but we learned some valuable lessons along the way. So much so that Carrefour asked us to take them mobile in Italy, too.
Since our platform was designed to handle traffic an order of magnitude greater than our Belgian venture would ever need, it gave Carrefour’s second MVNO, Uno Mobile, an instantly stable, tried-and-tested foundation that brought fast and flexible service configuration without sacrificing reliability.
From operator to enabler
We always intended to offer our platform and services to other brands who wanted to go mobile. While some MVNE vendors sell ‘turnkey’ technology without any firsthand experience of the practical business side, we truly take our own medicine. What could be a better ‘proof of concept’ than launching our own MVNO first?
Running a successful operation means having an intimate familiarity with processes, business cases, planning—everything that drives a business. It means understanding priorities, like knowing the difference between ‘nice to haves’ and ‘must haves’. Beyond providing tailored technology, we share the invaluable insights we’ve picked up along the way as a market-tested MVNO.
The future is ‘virtual’
When even small countries have multiple mobile networks, operators need to find ways to squeeze the most from their investment. Effortel’s Chief Marketing Officer, Liudvikas Andriulis, came aboard fresh from success at Eurocom, the largest MVNO in the Baltic states, where he’d launched TeleMaxima. This was one of the first integrated retail loyalty/prepaid mobile products in Europe and it convinced him that the most exciting developments in the mobile world come with virtual operators.
‘MVNOs can bring unlikely players into telecom,’ he says. ‘Retail brands especially have only just begun to explore the potential they have to engage with their customers. When retail and telecom converge, surprising new opportunities arise.
‘One innovation we introduced across our markets is free airtime for shopping. The more you shop, the more free minutes are printed on your receipt. It’s all automatic, so there’s no effort on the customer’s part. It’s simple, beautifully integrated and a compelling reason for people to remain loyal to the brand.’
Going global with local networks
While good marketing is essential to MVNO success, distribution is no less important. Brands that have already mastered a supply chain that gives them direct access to their end-customers have a distinct advantage.
‘Mobile operators today have to appeal to customers more by branding than by their increasingly similar services,’ Liudvikas continues. ‘The shift to MVNO lets companies—in any sector—take their business mobile. Many enjoy more global brand recognition and loyalty than a telecom.’
Effortel has helped brands expand around the world on whichever local network suits their strategy. With the greater differentiation offered by MVNO, we can also support multiple MVNOs in the same country, with customer propositions that needn’t overlap.
Making the numbers count
Ultimately, a successful operation is a lean one. Our MVNOs don’t have VPs across departments. They’re often run with a just couple of people. While it’s hard to generalise about numbers, we’ve developed a rule of thumb. In Europe, to make a 10%-15% EBITDA margin, you would need about 70,000 active subscribers, ARPU around €10-15, and a 50% margin on your airtime—as long as you are prudent with your OPEX (a fact that other consultants, who don’t run their own MVNOs, often neglect).
Today, Effortel remains a well-experienced group of experts who share a vision of MVNOs around the world—all served by technology running securely in Brussels. We have the team, technology and experience to roll out anywhere in the world.
Since launching Carrefour Mobile in Belgium and Italy, we’ve launched MVNOs with Carrefour in Poland and Taiwan. Our MVNE business started booming in Italy, with Daily Telecom as our first client, and eventually Vodafone Egypt, Vodafone Italy and Vodafone Malta starting working with us. And with Samatel in the Sultanate of Oman, we are currently the only Western MVNE operating in the Middle East. After a successful consulting mission in the Philippines with Globe Telecom we were entrusted to launch Globe Italia, the first MVNO in Europe launched by a major South East Asian MNO.
In 2014 we also became the first MVNE to enable an African MVNO – Equity Bank in Kenya entrusted Effortel with the launch of Equitel, a hugely successful MVNO. See Our Clients for full details.