By Vijay Sreenivasan, VP of North America, and Fabiano Netto, Senior Manager of Solutions Engineering
The U.S. mobile market has been dominated by the big three — AT&T, T-Mobile, and Verizon. However, the rise of new high-speed wireless technologies, coupled with consumer demands for more bandwidth and convenience, is putting pressure on these traditional operators like never before. As the big three’s new subscriber figures decelerate, cable companies have been the big winners.
According to a recent market report by Moffett Nathanson, cable companies snapped up three out of every four post-paid mobile net subscriber additions in Q1 2024. Top of mind for the big three's company executives is how to address declining revenue growth, so what can they do?
What’s driving new mobile market subscriber growth?
Having invested billions of dollars to roll out 5G services, resulting in relatively modest increases in mobile ARPU, traditional operators urgently need to monetize their new network infrastructure. Among the most immediate opportunities for creating new revenue streams is to lease underutilized networks to mobile virtual network operators (MVNOs), so called because they lease rather than own the underlying infrastructure on which they base their services.
Largely free from the constraints of traditional telecom players, MVNOs use their agility and flexibility to their unique advantage, targeting specific demographics and offering highly tailored consumer and business packages. Consequently, the MVNO market has more than doubled in size in the last decade and was most recently valued at $84.6 billion in 2023, enabled by three driving factors.
The barriers to entry are low for a new service provider to become an MVNO. For example, the U.S. has no regulatory requirement to own spectrum to provide wireless connectivity services.
The initial capital required to gain wireless connectivity is minimal, and there is the added option to work with a mobile virtual network aggregator (MVNA) and mobile virtual network enabler (MVNE) to deploy a full suite of services quickly.
New service providers can match consumer demand for increased bandwidth and seamless services in innovative, attractive ways, such as bundles, self-service options, easy onboarding powered by eSIM technology, and an end-to-end digital-first customer experience.
How cable companies succeeded in attracting wireless subscribers
Consumers have long wanted faster, bigger, better connectivity. In addition to fixed connectivity, consumers now have numerous wireless connectivity options with the continuous evolution of new technologies such as fixed wireless access (FWA), WiFi, 5G, and satellite. Contrary to general perception, consumers' actual total spend on communication services is increasing year over year. Hence, cable companies that are able to offer both fixed and wireless services are able to gain substantial market share with higher value for consumers for the same price point.
That is why multiple-system operators (MSOs) that added wireless connectivity to their portfolio have reaped rewards for new mobile subscribers in the last year. The ability to bundle services that consumers want into one easy package at attractive price points is proving to be a killer differentiator. Charter and Comcast, for example, sell mobile subscriptions alongside their home broadband deals. In addition, canny pricing strategies are attracting new customers in droves. Charter has offered highly competitive deals to buy out customers from existing mobile contracts, for instance, while Comcast has reduced the price of selected family plans.
Frictionless digital experiences that put the customer first
Customer expectations around mobile services are higher than ever. They’re on the lookout — and only too ready to churn — for high-quality, seamless digital experiences that offer convenience and value for their money. Since MVNOs first started offering mobile services, we’ve seen innovative offers from non-operator brands, such as Cricket Wireless, Mint Mobile, Google Fi, and many more.
However, the MSO and MVNO model offers a unique opportunity to disrupt the wireless market through fixed/wireless convergence. Thanks to the low barriers to entry and significant potential to expand their market reach, it’s not just an opportunity for established cable giants. It is an equally viable proposition for smaller cable companies, too. Recent examples of mid-sized MSOs entering the mobile market include Astound Broadband, Breezeline, Mediacom, and TVS Cable.
Exceptional service and enticing deals
These MVNOs are pushing the boundary when it comes to convenience, on-boarding, and bundling to appeal to customers. It’s a tried-and-tested route that MVNOs around the world have demonstrated. For example, the convenience of unified billing is something that New Zealand’s Nova Energy understood when it offered mobile services bundled with its utilities, ensuring customers get value and simplicity with a unified bill at the end of each month.
The MVNO focus on convenience, strategic bundles, and responsive deals is made possible thanks to their ability to roll out tailored, differentiated services to the market faster than traditional MNOs.
Supercharged innovation driven by AI-powered, cloud-based, digital BSS
With its 100x3x3 promise, Optiva has partnered with pioneering MVNOs worldwide to accelerate their launches with its MVNE platform. For cable companies seeking to disrupt the wireless market and grab mobile market share, this means developing a 100% digital customer experience as a new MVNO in as little as three months and rolling out new offers in three hours. It is the definition of agility, enabling MSOs to pivot and adapt to changing market conditions and new opportunities with increased speed and less risk.
Integral to their ability to respond to market conditions with new, tailored services is a new breed of MVNE platforms, such as Optiva’s cloud-native BSS and Optiva MVNO Hubs, which support the agility MVNOs require while streamlining charging and billing and using powerful data-driven insights to deliver more intuitive customer experiences.
To learn more about how Optiva’s AI-powered, flexible, cloud-based BSS engine can elevate and accelerate your MVNO launch, visit Optiva MVNO Hubs or contact us.