Networks versus MVNOs

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Posted Thu 30 October 2008 @ 9:20 a.m. by Ernie Newman

So Black and White Mobile has launched! TUANZ foreshadowed this on this Blog several weeks ago.

Its targeting the prepay market. It won't be appealing much to TUANZ members who are mainly "on account" large users, but no doubt it will find a welcome market especially among younger users. It deserves to succeed.

Its got a complex tie-in with Aussie-listed telco M2.

So lets not take anything away from Black and White. But I do have a concern about the misleading impact publicity about launches like this may have on public opinion.

When TelstraClear re-entered mobile several weeks ago with effectively a MVNO, some media hailed it as a "third mobile network." Obviously its not. Neither is Black and White. They are Mobile Virtual Network Operators - a sophisticated form of re-packaging of existing mobile services. But at the end of the day they exist by favour of, and on terms negotiated with, one of the two existing mobile operators. They're re-sellers - with greater marketing freedom than some, but re-sellers nonetheless.

New Zealand will only get real competition to drive down prices and improve services when we have a third real network - probably NZ Communications, but maybe some other investor from left field.

In the meantime lets keep our feet firmly on the ground. Competition MVNO-style is welcome, but it won't change the world for the bulk of the market. That's especially true of the big users, who increasingly feel unloved in the mobile space.

Categories: Innovation | TUANZ policy | Wireless carriers

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5 comments

  • Paul Brislen says:

    The problem then is not with the MVNOs themselves, but with the media and their inability to tell the difference between a new operator and a new network. MVNOs are well established all around the world - Virgin Mobile in the UK is one of the world's more aggressive mobile players and is an MVNO. BT has no network of its own but is an MVNO. I'm sure the New Zealand based MVNO market will quickly grow into a mature and competitive environment that competes just as much as the fixed line wholesale world will compete now we have structural separation of Telecom Retail and Telecom Wholesale. Cheers, Paul.

    Added: 30 October 2008, 1:38 p.m. Flag as Spam  |  Flag as Offensive

  • Questioner says:

    Is it not odd that all these new "networks" are being announced a week or two before a general election? Is somebody trying to tell us all somethinng?

    Added: 30 October 2008, 1:52 p.m. Flag as Spam  |  Flag as Offensive

  • Alan says:

    Paul, until B+W lowers their prices I cannot see them getting too much market share.

    Added: 30 October 2008, 11:31 p.m. Flag as Spam  |  Flag as Offensive

  • Neil says:

    What we need is a third Network player in the Cellular market. I remember back in the old days with Telecom and Clear, we did not really compete on price that much. We tried to maintain margins and competed on other things. (why would I gut my margins if I could possible help it. We traded customers with minor price reductions)

    It was only when a serious 3rd player came along that we had to go to bat against a company that had to buy market share through lower prices to survive in the market.

    Remember Telecom wholesaleing broadband. The margins were razor thin so that the ISP's could not win. Now that Orcon, Vodafone and Telstra/Clear based on LLU are going for it, you can be guaranteed that prices will fall.

    Likewise, it will take a third player in the cellular market. Pity the government through Kordia/Orcon could not invest in a third network. (given the reluctance of NZ Communications) Or become a cornerstone shareholder through Kordia. Now that would make things interesting and maybe speed things up.

    Added: 3 November 2008, 2:01 p.m. Flag as Spam  |  Flag as Offensive

  • Young says:

    There will be a new player in the MVNO market share. The company will be only selling plans and bulk minutes which will benefits some users. It will be launch sometime this month on a small scale, not much of exposure at present as they are testing the response from selected market segment.

    Added: 16 January 2009, 4:39 p.m. Flag as Spam  |  Flag as Offensive
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