The recipe for success
Before launching, MVNOs must consider that they will have to be in the business for at least one year before they break even. MVNO launch is usually preceded by six months to one year of start-up costs. Furthermore, they have to consider the post-launch subscriber acquisition costs which vary from country to country. These costs can delay an MVNO’s EBITDA breakeven and require considerable investment.
MVNOs need to have a worthy story, a source of differentiation and they must strive to secure a network deal at an attractive wholesale rate. Furthermore, they should carefully select their vendors and think of a flexible business model that would enable them to keep pace with the rapidly changing mobile industry. Additionally, they need to have a clear technology roadmap and be prepared for the transition from 3G to 4G and focus on following current trends, keeping pace with technology developments and anticipating future trends.
Most analysts agree that key success factors for MVNOs to keep debt and costs low are to have staff that understand the whole end-to-end process of mobile service delivery or work closely with highly experienced partners. Only the larger and stronger MVNO models are robust enough to justify the significant infrastructure investment of the MVNO.