KEY COMMERCIAL CONSIDERATIONS FOR YOUR MVNO CONTRACT

Are your MVNO contracts ‘Rogue-proof’?

Negotiating a contract with an MNO is a bit like preparing to go into battle, or as one of my recent clients said, “preparing for when the gentlemen leave, and the rogues take over.”

That’s not to say that operators are rogues, far from it. But, if you unwittingly slip up on the terms in your contract, you will surely know about it. A misplaced clause can create a whole world of pain for you and a heap of cash for the operator.

If you want to ‘play nicely’ then you need to know what you want out of a deal, and where you are prepared to compromise. Our masterclass at MVNO World in Vienna will explain all critical protections you must have in place, and the strategies for getting the clauses you want.

What insights and practical help will the masterclass give you?

1. The Wholesale contract is the most critical deliverable in any MVNO project. Without a contract there is no network access. Without a network there is no brand. Whether you’re negotiating with an MNO or an MVNA, you need a written contract detailing every specific element of your arrangement. That’s everything from the price for data, to the network innovation you’ll have access to, customer service models and SLAs.

2. Your wholesale bill will be the largest cost to your MVNO, so getting the commercial, operational and legal terms of this agreement set out before anything happens, is the difference between profit and loss.

3. You can negotiate. The bigger you are, (or how big you are expected to become), the more options you’ll have to squeeze contractual concessions from your operator.

4. MVNAs tend to have more rigid contracts. If you opt to work with an MVNA, and there are plenty of good reasons why you might, you're likely to encounter a far more rigid contract framework. MVNAs are built for volume so they use standardised contracts with MVNOs to back off their contractually responsibility to the MNO. Note, this doesn’t mean you shouldn’t try to make a contract bespoke to your business, but you need a plan before you enter negotiations.

5. Build relationships first. If the contract never comes out, then you have a great relationship. This is a sign off a successful working relationship based on shared visions and goals. This is so important, because partners should work in harmony to deliver shared growth goals. However, you still need contractual cover for the tricky times when your ideas clash or diverge – relationships will only go so far to help smooth the path, a legal reason to comply can save the day.

6. Identify your ‘what if’ scenarios. A typical wholesale contract may be 5 years. What if a new technology is launched by your MNO and you can’t get access to it for 12 months? What if the regulator makes a change that inflicts a dent in your pricing model? What if your MNO pivots or wholesale isn’t flavour of the month anymore? Build in protections and back off risks as part of your negotiations.

7. Get surety of supply. If the MNO has a change of strategy then there needs to be sufficient provisions in the contract to allow a move to another provider and an orderly hand over. Either party walking away with limited notice helps no one, particularly not the end customer.

8. What if things change? If you want to pivot or can see a way to exit then can you be sure the MNO will continue the wholesale deal to whatever direction you go in or with whomever you sell to? Equally, what if they have a change in strategic direction? Where do you stand? A well written contract will cover these eventualities.

I have seen real world examples where MVNOs have failed because their contracts were weak, or in some cases almost non-existent. When changes arose because of the macro or micro-economics, or changes in CEO and strategy, they came unstuck and rapidly spiralled into a place of being unable to compete and trade.

You cannot afford to get this wrong. If you can’t exit your contract and move to another MNO when your partner retracts its MVNO strategy, you really are snookered.

Don’t go it alone. There is help available. There are highly experienced technical and commercial advisors (like Graystone Strategy) that have been through the contracting process many times.

That’s why you’d be crazy not to sign up for the completely FREE MVNO Masterclass at MVNOs World in Vienna on 12-14th March. Use it to plan your approach, or review your existing terms so you can go back to the table and get what you want.

Book your place now!