FIVE MUST DO STEPS TO SECURE A WIN-WIN DEAL WITH AN MNO

You could say I’ve seen it all when it comes to MVNO launches. No matter where in the world, there’s a formula for winning and losing deals with MNOs. Over the last 30 years, I’ve negotiated on behalf of plucky start ups and some of the world’s largest operators. I know that the contract stands at the heart of success.

That’s why the team at Graystone Strategy has designed a series of masterclasses that distill my learnings, and those of the team who have also worked on both sides of the fence.

Each one is designed to give you the ingredients that deliver a win for you and a win for your host operator.

The Masterclass ‘Creating win / win partnerships with your mobile operator’ looks at how you can get a secure footing from day one.

Fundamentally it looks at the five things MVNOs must do when they make their first approaches to MNOs. To whet the appetite, I’ve listed the areas of focus for the class below.

Too much tech detail too soon

I’ve lost count of the number of times I have been brought in to help MVNOs who have failed to get the deal they were after because they got lost in their technology. They’ve not got traction with a commercial team and have no idea why.

I agree, telecoms is technical and full of incredible engineers who can build a great solution, but it’s a rabbit hole MVNOs must avoid when opening discussion with an MNO.

Think of it this way. If it’s the commercial team you need to woo, then talking tech is not first date material. Your first meeting needs to leave an impression that you are clear on your proposition, who you will target, and the size of the commercial prize.

You need to show off your vision for the brand, and how you will change the target customers’ lives. Bottom line, demonstrate you’ve got something others don’t and that the MNO would be crazy to miss the chance of courting you.

I should say, don’t risk being considered technically naïve. However, there is no point planning the detailed tech until you know that the MNO is interested. Yes, they will need to have a high level understanding of the value chain as this links to wholesale cost, but get them hooked first. The rest can wait until detailed workshops.

Wildly ambitious growth assumptions

When I was Head of Wholesale Marketing at Vodafone, there was a preconceived idea among wannabe MVNOs that MNOs are only interested in deals that deliver one million subscribers within five years.

I saw endless presentations that claimed rapid growth. It’s true MNOs want to partner with MVNOs that drive their wholesale revenue and incremental acquisition. But if the growth assumptions are ridiculous, the partners will declare themselves “out”.

So first of all, get this notion out of your head. You’ll only fall into the shark tank.

What MNOs want to see is a realistic set of market-based assumptions that build a proper business case. They know how difficult and expensive customer acquisition is, and they know how big the market is.

Don’t set unrealistic and fanciful targets because they might hold you to them with a punitive minimum revenue commitment. Instead, demonstrate you know the market, have done the research, clearly understand your customer, and present what is both realistic and achievable. They will respect you more for that.

Sense of entitlement

Entitlement is the stuff of first date nightmares, especially in markets where new MVNOs are mandated by the regulator.

Telling a prospective partner that they have to work with you is a bit like kidnapping your date - it’s not going to go well.

A partnership must be one that both parties enter into willingly. Even if MVNOs are regulated and there are clear reference offers in the market, you need the MNO on side.

Take the approach of exciting them about your offer and show them why it’s good business for them, rather than telling them they have to do it.

You are far more likely to gain additional and useful commercial concessions, whether that is helping you to get to market faster, supporting you with set up costs or putting in place growth incentives that assist with wholesale commercials or acquisition costs.

In markets that don’t mandate MVNOs, then there really is no obligation to partner. You’ll need to work hard to build the case if you want a fruitful outcome. Threatening regulatory interventions, competition reviews and so on are the nuclear options. Don’t hit the button.

Lack of preparation

There are a couple of well rehearsed management maxims that are relevant here. You’ll know them, I’m sure:

“Proper planning prevents poor performance” and ‘Failing to prepare is preparing to fail’.

I know some people consider these approaches to be as old of the hills, and therefore irrelevant, but actually they offer good advice when it comes to engaging MNOs.

Many MVNOs treat their first meeting as an exploratory chat. DON’T.

Firstly, the people you are meeting are busy meeting MVNOs every day of their working week. If your first meeting lacks impact there will not be a second.

Secondly, the teams you meet will be seeking to qualify the opportunity quickly. They will ask a number of questions to understand how much rigorous research and analysis is built into your plan. How well do you understand the market? Have you really done your homework? Give them insubstantial answers and you hand them every right to walk away.

You need to own the meeting. That’s the simplest way I can put it. Anticipate what they will want and give them the information they need upfront. That way, the only question they need to ask is ‘when shall we meet next?’.

Going it alone

Unless you are a seasoned MVNO entrepreneur, the chances are you won’t have pitched to many MNOs, and you probably won’t have negotiated that many wholesale contracts.

Your opposite number at the MNO is paid to assess MVNO pitches. They negotiate the optimum outcome for the MNO every single day. Remember this.

It’s likely that they have a strategy which outlines a specific criteria for partners that they will consider and a framework for the commercials that make it worth their while. It’s foolish to try and take on that level of experience without some help. But, weirdly, people still do.

The smart guys get help from people who have done it before, whether that’s friends in your network or professional and specialist legal and consulting experts (I could recommend a few).

This allows you to a) draw on their experience and b) leverage trusted relationships they probably already have with MNOs.

Join the masterclass to define your winning strategy

In our masterclass on 12th May, we’ll use real case studies - the good, bad and ugly - to identify the formula that avoids the mistakes above.

Masterclasses are Free to MVNOs World attendees but places are limited. Last year the classes were rated excellent with an average score of 4.8 / 5 so you’ll be on to a winner by joining. You’d be mad to let the opportunity go by.