Carrie Pawsey
Vodafone says 'we're open for MVNO business'
Vodafone has announced this morning that it is to embrace MVNOs on its network in the Netherlands, using them as a segmentation tool to reach niche segments of the highly competitive Dutch market. This follows an announcement last Thursday that it had a new MVNO partner, electrical retail chain Dexcom. Dexcom will launch mobile services under its own brand in the Netherlands in Q2 2007. Comment: The Dutch market has a phenomenal number of MVNOs/ resellers so it's not particularly big news that there another one is joining the fray! Ovum estimates there are in excess of 25 different mobile brands, many of which are very simple 'No Frills' voice and SMS resellers. However, many of these players have either consolidated or exited the market due to the harsh competitive environment or just that they haven't been in for the long haul.What is really interesting is that Vodafone is now embracing the MVNO model wholeheartedly. While there are many MVNOs in the Netherlands, most have resided on Telfort's network as it has an aggressive wholesale strategy together with its MVNE business MEC Solutions. KPN has since bought Telfort, and KPN also has a long history of using MVNOs and multi brands to offer customised tariffs and service packages both in the Dutch market and in its subsidiaries BASE and ePlus in Belgium and Germany respectively. We think this is a good move by Vodafone given the current market conditions. However, it's not the right strategy for every Vodafone operation. We're sure that the lessons learnt from the Dutch operation will be watched closely by other Vodafone wholesale managers. So what can Dexcom bring to the table for Vodafone? The company is a combination of three retail chains: 'T for Telecom', Tell Me and Dixons in the Netherlands. These stores sell mobile phones, computers and small electrical goods. The fact that it is already a significant mobile phone retailer means that it understands how to sell mobile and the stores are associated with mobile phones by the consumer. In addition, its large retail presence of around 350 outlets across the Netherlands and Belgium means it already has one of the key success factors in place: a strong distribution network. However, other mobile phone retailers have struggled to combine selling multiple MNO propositions alongside their own branded mobile service. For a retailer, striking the right balance between maintaining its existing revenue stream by selling on behalf of the mobile operators, while sufficiently promoting its own MVNO services is sometimes tricky. However, the owners of Dexcom have some pedigree in mobile - having set up and then selling UK high street chain DX Communications to BT Cellnet back in 1999.
