After focusing much of the previous years on rolling out their services and reaching their clients, in 2016 MVNOs should start to consider how to increase their margins in order to ensure profitability. A new connectivity monitoring and optimization system called EyesOnT helps MVNOs increase their profitability by analyzing real-time usage, billing, and rate plan data to detect anomalies and inefficiencies, while using alarms and automated steps to proactively reduce inefficient connectivity costs. EyesOnT was purposely built to address a wide variety of M2M/IOT business scenarios. Here are some of the ways MVNOs can use EyesOnT to reduce their costs by as much as 20%-30%.
- Rate plan optimization by re-allocating SIMs – One of the main factors that influence the MVNO’s profitability is, of course, the margin between the “wholesale price” from the MNO and the “retail price” offered to end-clients. As MVNOs get bigger economic scale, they might be able to re-negotiate their contracts with MNOs, however there is another way to increase their margins without any negotiation.
MNOs offer MVNOs a variety of bundle and pooled bundle rate plans (e.g. 2MB, 5MB, etc.). Although the initial allocation of SIMs into the various bundles is performed arbitrarily, most MNOs allow re-allocation of SIMs into different rate plans before the end of the monthly billing cycle. In essence the MVNO can move SIMs from one plan to another based on the actual usage. So for example, if a SIM in a small plan (e.g. 2MB) ends up consuming more, they can move it to a larger plan in order to avoid costly surcharges. The same logic works vice versa, if a SIM on a larger plan (e.g. 5MB) consumes less data, they can move it to a smaller and cheaper plan (e.g. 2MB) to save the extra cost.
Obviously this type of usage monitoring and optimization cannot be achieved manually and it’s virtually impossible with CDPs (Connected Device Platforms) as you will need to predict the actual usage ahead of time and figure out what is the optimal plan for each individual SIM. EyesOnT is the only solution in the market that offers this type of functionality. By analyzing usage patterns EyesOnT predicts the actual usage for the entire month and suggests the re-allocation of SIMs into the most cost-effective rate plan tier. EyesOnT’s optimization algorithms support a variety of rate plan models, including bundle rate plans as well as pooled bundle plans.
- Deactivation of inactive SIMs – MNOs allocate large amounts of SIMs to the MVNO, but do not start charging until they are activated (“Active” status). The MVNO can identify the SIMs in the various deployments that are actually inactive and change their status, thereby avoiding their subscription cost. However with thousands and often tens of thousands of SIMs deployed it is very difficult to identify these inactive SIMs. EyesOnT analyzes the usage data and automatically identifies inactive SIMs that have been configured as “active”. These SIMs can be automatically configured as “Activation-ready”, making them available for instant activation, while saving their subscription costs for the MVNO.
- Roaming Optimization – another type of optimization that can save MVNOs substantial costs are roaming charges. Roaming on non-preferred networks is offered to end clients as a means to ensure availability and coverage. The MVNO/MNO sign roaming agreements with some networks, but they have no way of knowing if the device is connected to these preferred networks at any point in time. Although MVNOs charge their clients for the utilization of this extremely costly non-preferred usage, the profit margins are also very low and usually result in client bill shock. EyesOnT detects these non-preferred connections in real-time and prevents them on a timely manner, while providing indications regarding the possible root-causes.
- Enhancing self-service – reducing support costs is also critical for MVNOs wishing to increase profitability. Some MVNOs offer their clients with access to their CDP systems, however these systems focus solely on the individual SIM level and do not provide a deployment or APN perspective. With EyesOnT, MVNOs can offer a value added self-service portal to end clients, where they can monitor their entire deployment, optimize their connectivity costs, manage their SIMs and view important alerts. The portal features a set of predefined and configurable dashboards and reports. These capabilities can be provided as a VAS offering, creating new revenue streams, increasing customer satisfaction and maintaining a competitive advantage.
These are just a few scenarios in which MVNOs can use technology to increase their profitability in 2016.