Speaking to Telstra Wholesale customers at the recent Business.Connect17 event, Nicole McCormick, Practice Leader of Ovum’s Broadband and Multiplay team, discussed MVNO market trends, growth and strategies to address the ‘changing digital consumer’.

The demands of today’s consumer have shifted immeasurably over the last 10 years. Digital has changed everything, moving the balance of power firmly to the consumer, who requires an instant response to their wants and needs.

The ‘build it and they will come’ mentality that served companies so well for decades has been replaced by a consumer demand that is entrenched in digital. The rise of digital services and the ability to access anything from anywhere at any time has pushed organisations to rethink how to bundle services for the evolved consumer. Business models across the board have changed to accommodate this shift and MVNOs are not immune either.

In the wake of what we’ve termed the ‘Netflix revolution’ in Australia, Ovum conducted a global consumer study, which drills down to one very important consideration for MVNOs:

How many of your customers will remain with your business in the next twelve months?

Australian consumers are re-examining their current bundled offers. More choice to meet the demand has led to greater competition among providers. The core finding from our survey was that 35 percent of Australian consumers are considering changing their bundle or bundle service provider in the next twelve months.

While that might strike fear into some, it also represents a massive opportunity for the digitally savvy MVNO to refine their approach to market and align it with this new state of customer demand.

Moving beyond a race to the bottom

Our surveyed consumers said that they want either a cheaper or better value bundle,meaning MVNOs can add serious weight to their offerings to give consumers more desirable deals, which could include value add, in the form of data allowances or entertainment.

Looking further into the consumer pain points, one of the main causes for dissatisfaction is around the flexibility of the bundles on offer. Consumers want to 'build their own' bundle, rather than having the decision made for them. They’re prepared to assemble niche offers from different providers if they can’t get what they’re looking for.

Bundling new products

MVNOs should consider investing in new verticals and horizontals to boost growth, going beyond the comforts of telco purchases to non-telco ones such as power, gas and insurance for example in the verticals sector. New horizontal offerings could include fixed broadband and converged offerings too. Globally, traditional incumbents have been fairly slow off the mark to invest in vertical services, which should play well into the hands of MVNOs who are quicker and nimbler to react.

All of this however leads to the point that as competition increases, pursuing non-legacy mobile services can assist in keeping customers ‘sticky’ as well as growing the customer base further once they’re established and loyal.

In that regard, better customer service needs to go hand in hand with MVNOs building up their profile as “one-stop-shops” for telecoms and non-telecom purchases. There’s no point setting up the infrastructure to service consumer demand if it’s not met with efficient customer service and experiences too.

In the second part of this article, I’ll discuss how MVNOs can tap into the change in customer behaviour to build growth into their business.