Real-time billing specialist MDS unveils VNOnDemand service to help virtual players cut costs and innovate.

MVNOs must shift from simply offering low prices to providing a more innovative customer experience if they are to survive in what is an intensely-competitive market.

That is the message from Andy Peers, vice president of service innovation at real-time billing specialist MDS. On Monday, the company launched a new managed service, called VNOnDemand, which aims to help virtual players optimise their costs and use the freed up capital to invest in service innovation.

A typical, small-scale prepaid MVNO is "predominantly a sales and marketing operation; it is not tech savvy," he explained to Total Telecom ahead of the launch. In a competitive market, these kind of MVNOs can become trapped in a downward spiral of declining ARPU, and with margins under acute pressure, there is no obvious solution.

"We want to reverse that spiral," Peers said.

MDS’s VNOnDemand service aims to help MVNOs reduce their subscriber acquisition and retention costs, and wholesale costs, "which gives you more wiggle room," he said.

This is achieved in part by analysing customer behaviour to predict future usage, so that the MVNO has a clearer idea about their network capacity requirements. Knowing how much voice, messaging and data its customers use today, and being able to forecast what they might use going forward, can also help an MVNO provide a more tailored customer experience. It is this combination of cost reduction and service innovation that MDS’s VNOnDemand claims to be able to accomplish.

Indeed, with lower costs and better insight, MVNOs are a in a stronger position to innovate, offering customers a greater choice of tariffs, for example, or the flexibility to buy another month of service early in the event their data allocation is all used up.

Peers also urged MVNOs to look beyond servicing individuals and consider targeting families, or small businesses.

"Think about what other services you could offer, like fixed broadband or Netflix," he suggested.

Companies that offer MVNO services as a side business, such as supermarkets, have a great opportunity to offer mobile data as a reward to loyal customers, Peers continued.

At the moment, "they are still giving out vouchers on paper," he said.

VNOnDemand is launching first in Europe, followed by Asia. The company is already pursuing 3-4 opportunities in the U.K. alone, said Akil Comoko, principal consultant, MDS.

"We’re looking for Goldilocks MVNOs" that are not too small nor too large, "helping them to grow from a few hundred thousand customers to 10-20 million," he said.

Operator strategy is a core topic at Total Telecom Congress 2017, which takes place in London on 31 October-1 November. Click here to find out more.