Analysts/Reporters on Planet Zog

I just can’t believe this article entitled “EasyMobile fails, but rivals succeeding – analysts”. The best thing I can think is that the journalists want the little man to succeed, however to do so in such a biased manner is unacceptable for a “balanced” journalist.

My first argument is that “MVNOs are heading towards 25% market share in Europe” – this is obvious nonsense. The most important measurement of market share is revenue and the MVNO’s do not approach anywhere near that, especially since they pay the vast proportion of their revenues to the MNOs. How stupid is it to quote subscriber figures as an indication of the size of the market? The market has moved on from this.

My second argument is the classification of second-brands set up by the MNOs such as Simyo by e-plus (KPN) as part of a “MVNO phenomena”. How ridiculous is that? – a MNO gives another service a new name and all of a sudden it such be included in statistics showing the demise of the MNO’s – I don’t think so. Also, a MVNO being bought out by a MNO means they become part of the MNO and not the MVNO, the economics fundamentally change with respect to on-net traffic and termination fees.

My third argument is “A low mobile phone bill is indeed what customers want, said analyst Ed Achterberg at TelecomPaper” Hmmm, not true in the UK: easyMobile are going nowhere fast with a SIM-free approach over the net (and have recently added physical store distribution); Fresh is competing via the CarphoneWarehouse retail presence and is in fact losing big money for CPW; all the VirginMobile promotion is geared towards contract customers rather than pre-pay. I can’t comment throughout Europe but in the UK this statement is patently nonsense.

Finally and most unfortunately is that the journalist has not sought a balanced approach. Although John Strand is a true innovator in mobile, he cannot be claimed as unbiased with his working on Telmore in Denmark and touting his services as a MVNO expert. Of course, John Strand is going to promote the view that despite easyMobile shutting its’ doors, all is still well in the MVNO market.

In my opinion, MVNOs are currently in a desperate situation, because now at least one MNO in every market will not let a new entrant claim a share of a niche market as has happened in the past. Worst for any MVNO new entrant is that, they do not have a cost advantage and they never did, in fact they worked in the past based upon MNO inertia. Even worse, I do not think the “Saunalauthi burnt earth” strategy will ever work again. The MVNOs will have to dream up a new game other than no frills to be successful in the future..