MVDO — Mobile Virtual Data Operator
With Collaborative Data Ecosystems(CDEs) we are already seeing a new type of solution being created and for Telcos, Collaborative Data Ecosystems are the future, but the question is “what and how?”. I’m not going to address the ‘what’ here, as there are loads of potential use cases, the question today is much more about the how. And it is here that I think Telcos, and other companies, are struggling to see how they build a business around data collaboration. Many are getting comfortable on using CDEs to improve operations, but the question of route to market is a challenge.
Often this is because the thinking is inversely constrained by the companies current boundaries. What do I mean by inversely constrained? I mean that the company takes a maximal approach to a potential business and uses the current boundaries of a limitation, basically put: “This idea has the ability to be global, we can’t go global like that, therefore we can’t do that”. Companies are constraining their ability to expand to the scope of the current business.
This misses two points.
- The collaborative business could be a business in its own right
- The corollary is that a global provider could provide the solution within your current scope
Uber didn’t start with “we have to be everywhere before we are anywhere”, nor did an awful lot of the companies out there today. They started in an area where they had control and then expanded that business beyond its initial boundaries. This is how companies, and particularly Telcos, should think about CDEs:
Where can you pilot an idea where you have a competitive advantage today?
In other words ignore the scale out challenge until it is a scale out challenge. If you can pick a market where you already have connectivity advantage, and potentially dominance, then you can pilot a CDE business and do so with a significant degree of control.
If it succeeds then you can expand to other areas where you have control. So you pilot small and you already have the expansion plans available if that pilot proves viable.
As that grows you can then look at challenge 2:
How do we disintermediate the network?
This stage is where you look to turn that CDE into a new business line, not simply something that drives network traffic and engagement, but can you scale that to be a global provider. This is what I think of as the evolution into an MVDO — a mobile virtual data operator, like a MVNO, but its about Data not Network as the product.
For non Telco folks: In the world of Telcos there is a type of company, an MVNO, a Mobile Virtual Network Operator, people like Tesco Mobile, Cricket, etc who don’t own the physical network but instead bulk buy access from the major network providers and create a virtual network that they then resell to consumers.
There are many ways to scale out this sort of business and create the MVDO, but I’d put them in 5 broad baskets:
1To create the MVDO you create an MVNO and provide the service in the same way as you did on your own networks, just without the direct control. This can work well where the CDE is partly about the price of network connectivity but doesn’t require the deployment into devices within the network.
This model would be a separate division but might not be a separate company given the importance of the network contracts and contact.
2 Abstracting the CDE above the network so it no-longer cares about the network infrastructure, this would work particularly well where the CDE either isn’t geographically focused, or is geographically focused but you don’t need to deploy into the edge of a network. This is effectively where you’ve piloted an Uber style model for something that absolutely relies on connectivity, but doesn’t care which network provides that.
This model is very much a ‘startup’ with a view to becoming a separate business division or company.
3 MVNO with edge control is a variation on the first, but effectively a negotiation with other operators that allows some form of deployment to the edge. Given the importance of the edge to the future of Telcos this is both some thing that makes sense and a challenge as it both enables the Telcos to provide more services, but also removes their ability to out-compete via a network advantage. In this case the scale out would be the same as in any area, just with potentially different edge deployment, management and monitoring processes.
This model is much more likely to be a business division rather than a separate company given its need network requirements, but clearly it could become a separate company if required.
4 Make it a Telco service. In this scale out model the objective for the original Telco isn’t to expand beyond its network reach, but instead to spin out a software company that can sell to other Telcos and enable them to deploy the solution. In this sense it isn’t a ‘true’ MVDO but a software or SaaS business with Telco customers.
This is probably most obviously something that would have to be rolled out into a separate business to enable other Telcos to use the software and not worry about funding a competitor.
5 Make the MVDO an inter-Telco collaboration. If the solution requires deep network access and control, so can only really be delivered by the physical network operators, but you still can create a consistent user/market experience then having the MVDO work above multiple operators (with the standard challenges on contracts, share ownership, etc) would provide a way to scale such a business.
This would become a JV structure or other collaborative deal, this would particularly work where the geographic nature of the solution benefits local ownership and regulation. It may provide a unified service to the end-consumer, but need different partners and compliance approaches for each Telco.
The point of the MVDO is that not being able to do something globally is not a reason not to incubate globally. If the idea blows up and truly becomes a huge global business then yes, that will go beyond the current scope of a telco. But creating a huge global spanning business shouldn’t be viewed as a negative.
Pilot small where you have control, then expand within your control while looking how you can transform it into an MVDO.
