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Mobile Healthcare: Future Calling

Posted in The Technology Ecosystem, Value added services and applications by Manas Ganguly on April 15, 2010

John (35) is a middle manager in a large corporate. 2 years back, John was diagnosed to be diabetic and he has to visit his physician every Wednesday for a weekly blood check. It is difficult keeping up with the time, manage office and traffic and more. Fortunately, John uses this new application on his mobile phone wherein he sends weekly blood tests data to the computer of his physician. He gets the blood tests done through his glucometer, feeds in the data to his smartphone and sends it over to his physician who does the regular data checks and advises on course of action/course correction. This way John has reduced his monthly visits to the physician to 1-2 per month instead of 4 per month.

Featuring Mobile Healthcare!

Bollywood, Astrology, Cricket and Devotion are the growth engines of mobile VAS industry. However, I strongly believe that value to the consumer will not be so much from the A-B-C-D of mobile VAS as much from the more relevant services, like education and healthcare. It may be due to lack of spectrum for large volume data transfers of legal implications of distance health monitoring, Mobile Healthcare is a nascent market in India. This in spite of the fact that most of the time, people consult their family physicians over phone and get the diagnosis done telephonically.

According to a recent report from Juniper, revenues from remote patient monitoring using mobile networks will rise to almost $1.9 billion globally by 2014, with heart based monitoring in the US accounting for the bulk of early mobile monitoring roll-outs. The Mobile healthcare market also includes health and fitness mobile applications that will thrive and eventually spawn a new market for advanced apps which integrate sensors worn on the body.

So what’s next on the horizon? How about Health care MVNE? A Fortis Healthcare Connection within an Airtel connection that gives the users (mostly Fortis patients) the ability to connect with their doctors on a call. Whats the number of such an MVNE? Well… just estimate the number of Heart patients and diabetics in India….

Understanding MVNOs: The US and European Case studies

Posted in The Technology Ecosystem by Manas Ganguly on March 22, 2010

The second coming of MVNOs in US

On Monday, Sprint said has signed deals with four MVNO partners interested in offering post paid wireless services under their own brand – Long Distance Consolidated Billing Company (LDCB), NPG Cable, Call One and Baja Broadband. NPG will offer a quad play bundle combining video, internet, home phone and cell phone service, while Chicago-based Call One will offer a single source for integrating voice, data, video and internet services with phone systems and network equipment, wiring, installation and management. Baja Broadband will enhance its broadband cable system in New Mexico, Colorado, Utah and Nevada and LDCB will bolster its wire line long-distance service with wireless.

The US versus Europe MVNO Debate

This is good news for MVNOs after almost being written off from the map of United States. So is this the second coming of MVNOs or is it just consolidation after the end of the initial hype. Contrary to the US markets, the UK and European Markets have successful examples of MVNOs and MVNAs running. In Europe Tesco Mobile is major player, but we haven’t seen the same model succeed in the US which also has large volume retailers like Win Dixie, Wal Mart, Target and others. Amongst others, ESPN Mobile and Disney Mobile have failed in US and Virgin Mobile is struggling. In the UK, Virgin Mobile is a major mobile brand.

The one difference that seems to emerge between the US and the European markets is that the Europeans seem to be able to stick to a business plan that caters to a niche. The US investors have been overeager to dominate a whole country when they should be content with one or two states or categories.

So what’s working and what’s not

The strategy of adding value through price is not going to last long, if it hasn’t passed already.

The MVNO model is alive and well in Europe and what is really promising over there, as in the US, is that network operators are behind the model now rather than fighting it. Over time this will lead to greater access and control to the underlying infrastructure for the MVNO, giving the capability for further innovation which, is really where the MVNO model will thrive and have a big impact on the industry as a whole. Opening up and allowing more control of the underlying network and its capabilities will essentially allow the MVNO to act as another service layer with which to develop and offer more innovative products and services particularly in the apps space. In my opinion the products and services in the broader market today really are just at the tip of the iceberg in terms of how telecommunications can help us in our everyday lives

The stunted growth in terms of innovation so far, would be to do with protectionism by operators, or the walled garden approach as it’s become known.

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Infosys Flypp: Unveiling the MVNA/MVNE era

Posted in Industry updates, Value added services and applications by Manas Ganguly on March 8, 2010

How Infosys powered Flypp platform for Mobile Apps would redefine MVNA/MVNE constructs

Days after Airtel announced its Apps store, Infosys, India’s 2nd largest IT services company announced its plan to roll out mobile application stores for 9 mobile operators across the globe. Infosys is already partnering with Aircel to build Aircel Pocket Apps. Infosys is working with 2 more Indian Carriers and has other operator partnerships in West Asia, Europe, Africa and North America. Infosys claims that it can deliver a full fledged apps store within 6-8 weeks, with its applications platform, Flypp. The Flypp platform allows Infosys to develop utility-based apps that can be used across mobile devices, regardless of the operating systems or hardware constraints. The apps featured include apps developed in-house as well as those developed by Apps Developers.

As part of Infosys’s new engagement models (NEMs), Flypp is offered to operators on a revenue-share basis. Flypp hosts 2,000 apps that can be directly deployed by mobile operators into an app store and we will grow the number to about 10,000 by mid-2010,

NEM strategy and its mobile application implementation at Infosys, is a critical business unit for the company. Flypp is able to provide operators a host of localized mobile apps that can differentiate one app store from another and drive data consumption at the customer end. Flypp provides independent software vendors a viable and attractive channel to showcase and monetize their proprietary applications across multiple geographies and service providers. App developers are not charged to host their apps; only when an app is downloaded by customers does the operator pay for the download and revenue is shared with the developer.

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Infosys only began targeting the domestic telecom market during the past 12 months, having previously targeted its efforts towards North America and the UK. Already the mobile platform has helped the company to report good numbers from the telecom industry that contributes nearly 16 per cent to its revenues. For Infosys, Flypp allows it to price its services based on business level outcome against input based pricing or fixed price projects. Expected to be a critical focus area for the company, nearly 1/3rd of the company’s revenues are estimated to come from NEMs in the next 5-7 years. Currently, the non-linear initiatives contribute about 5 per cent to its revenues and the pie is expected to grow going forward. The Indian market’s contribution to Infosys’s revenue is a mere 1.2 per cent, and with initiatives such as these, the company wants to increase its domestic revenues.

Infosys with its global presence and IT experience should be able to re-define Mobile Virtual Network Enablers and Aggregators (MVNA/MVNE) in its true sense. With its platform approach, Infosys becomes the enabler for Mobile companies to leverage on Infosys’s IT development strengths. This also helps Operators to focus on their core business and leave the IT led apps development processes to the IT specialist.With its ability to pull the pool of Apps developers and giving them a larger canvas/market, Infosys could soon evolve into an aggregator as well. There are challenges in managing a eco-system, but Infosys has a formidable reputation to back it up. What goes unsaid is this move allows Infosys to have a very sound stepping stone into the Mobile Industry through the Apps route.

Bottomlines: The Flypp powered App store may be a success or failure for consumers or Telecom Carriers, but in the long run, it will be an ideal stepping stone and learning experience for Infosys in terms of Consumption of mobile apps and internet. The Insights could be leveraged in other ventures for Infosys

Is India ready for MVNOs?

Posted in Industry updates, Value added services and applications by Manas Ganguly on April 30, 2009

 

This is the second post on the series: The advent of MVNOs and discusses the MVNO environs in India!

 

A few months back, Sunil Bharti Mittal (CMD, Bharti – Airtel) went on record saying that the MVNO model will not find many takers in India (read report). The idea was that with the kinds of tarriffs prevalent in India, MVNOs will not be able to sustain business and be profitable. The fact that Virgin Mobile’s foray into MVNO platform has not been as hugely successful bears this statement for the time-being. But in a long term basis, can MVNOs be ruled out of the country? Diamond, a global management consulting firm has some interesting pointers in terms of emergence of the MVNO business models in India.
1. The threshold mobile penetration levels (for the emergence of MVNOs) in these markets are around 40%! –> Markets typically display a level of mobile penetration above 40% at the time of launch of the first MVNO.
2. Higher levels of industry wide consolidations favor the launch of MVNOs.
3. Less competitive markets (high levels of dissatisfaction amongst consumers) favor MVNOs (because they cater to new customers and innovative solutions).

A study of 16 countries where MVNOs have been operating for a few years now, conducted by

India with its fastest growing telecom subscribers status is typically a mash of various degrees of penetration. On one end, the A category circles have 70 – 80% penetration ratios and on the other end, C category circles are at 15 – 20% penetration status. Thus India is to be seen a collection of 23 separate markets instead of a single homogenous market when assessing the opportunity for MVNOs. The Cat A and B circles are over ripe for MVNOs and there are states, where the MVNO business would not be as effective given low penetration levels. Also the tariffs are getting rapidly commoditized and if its were not for the consolidation, these tariff would be close to unprofitable! Number portability could rapidly increase churn in the eco-system, unsettling the top rug high ARPU consumer bases with the existing operators.

Within these set of circumstances, there may exist an opportunity to serve users better or serve a high profit niche segment. With the penetration levels at 32% nationally and tariffs touching lows, the MVNO route may be a key differentiator and an access to higher premiums. One needs to be define MVNO at this time. A re-selling, re-branded plain vanilla will not be attractive to users. In the case of Virgin, it has done some excellent work in associating itself with a category of customers. However, its proposition is based on cost which by itself is not the best way to differentiate especially if you are re-selling airtime.

Thus it is important, that the MVNA and MVNE route is taken to differentiate oneself in this market! Healthcare sector is one lucrative idea for MVNA/E, so is department of posts and telegraph, railways, banking etc. There is a need and necessity for including this diversity into the existing eco system. This would constitute differentiated service to consumers for which they would be ready to pay premiums. A focused attempt centered on the metros and high penetration areas can also keep costs under control and if the collaboration within the players in the eco system is good, can lead to high profit businesses.

Should we reconsider the model once more, Mr Mittal?

The third part of The advent of MVNOs will deal with the legal challenges of establishing this business in India.

 

 

 

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Study: The advent of MVNOs (Part I)

Posted in Industry updates, Value added services and applications by Manas Ganguly on April 28, 2009

A Mobile virtual network operator (MVNO) offers mobile voice and data services without owning any spectrum or infrastructure. Basically it leases network from a Mobile network Operator (MNO). It uses the leased capacity to sell retail services to consumers under its own brand name leveraging assets such as a strong brand, loyal customer base, exclusive content or an extensive distribution channel. At one extreme the MVNO can adopt as “pure reseller” position, where in it re-brands MNO’s service using its own brand name and sells it through its distributor channels. On the other hand, it could adopt a “pure MVNO” position, providing value added elements in its offering. The decision to adopt a given business model is governed by several factors including the targeted scale if business, level of in house telecom expertise, extent of initial investment the MVNO is willing to make and the level of risk the MVNO is willing to undertake.

mvno-business-models-0

 The schematic given above is a representation of the US MVNO markets.

The earliest MVNO in the US market was Virgin Mobile and Qwest, who had their processes and platforms to complement the MNO network. They did this by either purchasing platforms or operating them in-house or through dedicated partnerships. At the next level with multiplication in MVNOs, the market started migrating to parties who could provide relevant BSS/OSS processes and platforms.These service providers whose core competence was the platform and they build the mobile services around this platform are referred to as the Mobile Virtual Network Enablers (MVNEs).

With increase in Market complexity, there emerged a class of Mobile Virtual Network Aggregators who acted as intermediaries between multiple MNOs, handset providers and back end platform providers with the MVNOs. Hence these were the experts in the field who served to reduce risk and time to market and lower the risk profile of launching an MVNO.mvno-business-models1

 

 

 

In saturated and high mobility markets, with excess capacity, MNOs have a choice of acquiring retaail consumers to fill up the network or filling up the network on whole-sale basis to a MVNO reseller, or a combination of both. The decision should/is influenced by the idea of maximizing Average Margin per Minute (AMPM). The AMPM is determined by factors such as
1. Price charged per minute
2.Subscriber cquisition costs
3. Costs of serving a customer (Cash Cost per user CCPU). The CCPU depends upon network related costs and other non network related costs.
As the markets mature, the AMPM shrinks due to increasing price competition, increasing acquisition costs, increasing costs of providing servicing and support and other factors such as change in mix of services, loss in share of high margin services etc. In such situations, the MNOs may find that AMPM asociated with wholesale minutes is higher than their averages. In addition to that, there could be niche, smaller markets, where the MNO may consider an investement to be unviable (given its operations). MVNOs could be used to address those specific niche markets and consumer segments.

Highly penetrated markets with limited competition between mobile network operators may lead to a situation where some customer segments are likely to be “underserved” in specific aspects of mbile experience. The dissatisfaction could come from either poorly tailored products and services or other brand intangibles. This is a classic case of short comings of the “One Size Fits all” strategy –> MNOs have scale benefits and lower operating costs but miss out on the Customer satisfaction bit.

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