Channel Rebalancing in Mobile Markets
2009.07.09   |   39 pages   |   MVNOs & Distribution Strategies   |   Consumer Contract Segment

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In mature well-penetrated mobile markets, changing market dynamics are forcing MNOs to reassess and adjust their channel mix. Market reach continues to be a key objective in Mobile Operator Distribution strategies but this is increasingly counterbalanced by the desire for increased channel control (more direct channels), reduced SAC/SRC, improved cross/upselling performance and an extended customer life expectancy.

The current report shows how operators are looking to increase the share of directly controlled (brand exclusive) channels and improve the customer purchase experience by ensuring more purchases through assist rather than 'non-assist' channels. In parallel, operators are looking to increase Online sales. While most operators believe the ceiling for online sales rests at 15%-20% of mobile connections, we present a case illustration of best industry practice in the current report demonstrating how one operator is achieving 50% of sales via this channel. In a separate case illustration we show how another operator has reduced its predominantly prepay acquisition and retention costs by almost 40%, while adjusting its channel mix.

While the current paper focuses on motives and outcomes achieved through channel rebalancing initiatives, it also provides details of channel performance improvement initiatives identified during our discussions with MNOs. The paper closes with a series of conclusions and recommendations which will be of specific interest to those tasked with optimising the mobile distribution channel mix.

Keywords: Distribution, Distribution Strategies, Channel Rebaancing, Retail,

Table of Contents
1 OVERVIEW 1
2 INTRODUCTION 2
2.1 Background to the Report 2
2.2 Currency and Conversions 3
3 MNO CHANNEL STRATEGIES 4
4 MOBILE OPERATOR CHANNELS 7
4.1 The Service Mix 7
4.2 The Channel Mix 7
4.3 Drivers for Channel Rebalancing 10
4.3.1 Controlling & Reducing Costs 12
4.3.2 Increased Market Reach 16
4.3.3 Cross and Upselling 16
4.3.4 Customer Life Expectancy 16
5 CHANNEL REBALANCING ILLUSTRATIONS 18
5.1 Western/Central European MNO (5 Million+) 18
5.1.1 Direct Retail Stores 18
5.1.2 Online/Web Sales 19
5.1.3 Call Centres & Telesales 20
5.1.4 Convergent Selling 21
5.1.5 Data Selling 21
5.1.6 Changes in the Indirect Channel Mix 21
5.1.7 Proposition Controls 22
5.2 North European MNO (1-5 Million Customers) 22
5.2.1 Background 22
5.2.2 Indirect Channel Dependence 22
5.2.3 Reducing Distribution Costs 23
5.2.4 Adding Value - & Changing the Channel Mix 23
5.2.5 Own Store Changes in Recession 24
5.2.6 The Web Channel 25
5.2.7 Telesales 25
5.3 Global MNO Group (100 Million+ Subs) 25
5.3.1 The Controlled Channel Mix 26
5.3.2 Other Observations of Note 28
5.4 MNO Distribution in Europe - Recent Trends 28
5.4.1 Background 28
5.4.2 Customer Lifetime Value Driven Commissions 29
5.4.3 Reduced Channel Costs 30
5.4.4 Subsidy levels 31
5.4.5 Motivations for Increased 'Direct' channels 32
5.4.6 Online Selling 33
6 KEY CONCLUSIONS 34
7 RECOMMENDATIONS 37

Our Clients

A valuable program, differentiated by its best practice case study approach. Many external providers supply regular updates on MNO KPIs, but it's how operators are approaching these issues we want to know about Orange Group
Mobile Market Development 2015