The emergence of MVNOs Providing new opportunities for MNOs and MVNOs

Agenda
The challenge of roaming for MVNOs

The opportunity of EU regulation

The opportunity for Mobile Operators

Hybrid roaming Conclusions

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Meet Todays Team!

Stephen Breen Head of Roaming Xavier Bourgois Senior Roaming Product Mgr. Frank Salembier Mobile Data Account Mgr.

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The challenge of roaming for MVNOs

MVNO roaming
Global MVNO in 2015 : 186 million subscriptions North America and Western Europe dominate.

MVNOs represent more than 25% of roaming traffic in some markets

Mature MVNOs move to a Full MVNO Model Full MVNOs have Own Core Network & IMSI Range Need to start Roaming Management From Scratch Require Outsourcing of Roaming Management

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What types of market player exist?

Mobile Network Operator (MNO) Mobile license Mobile infrastructure Direct customer relationship Network routing Roaming agreements Customer service delivery Billing Mobile handset management Mobile Network Enabler (MNE) Mobile Virtual Network Enabler (MVNE) Mobile Virtual Network Operator (MVNO) Branded reseller Service Provider

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What are the industry trends?

Smartphone adoption is rapid Data usage is exploding Handsets are becoming more sophisticated Commercial models are evolving More & more full MVNOs (rather than light MVNOs that have less independence) Diversification beyond always following a Low Cost mantra
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Why are MVNOs creating interest?

MNOs view MVNOs as outsourcing partners MNOs are having increased difficulties in targeting all local market segments MVNOs are a medium for implementing a more specific Marketing Mix for niche targeting MVNOs alleviate certain costs from MNOs (e.g. Customer service, billing & marketing) Overall; MVNOs help in churn reduction & revenue growth
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Consider some MVNO market shares

Germany Norway Netherlands UK France Oman Hong Kong USA Denmark Australia Finland Japan South America
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19% 16% 14% 13% 10% 9% (FriENDi & Renna) 8% 7% (Tracfone) 5% 4% (Red Bull, Virgin & Boost Mobile) 2.5% 2% (JCI) <1%

Why can an MVNO fail?

1) 2) 3) 4) 5) Brand rationalization Lack of demand Lack of funding Regulatory Unprofitable

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BICS delivers roaming to MVNOs

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Full MVNOs are outsourcing roaming Management Dual IMSI hubbing provides MVNOs with one step immediate worldwide roaming footprint Single IMSI hubbing provides a long-term solution with ability to negotiate IOT BICS provides an extensive roaming portfolio to deliver a one stop shop roaming service to MVNOs

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The opportunity of EU regulation

Impact of new EU regulations

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New EU roaming regulations will enforce opening of roaming with European operators and stimulate creation of MVNOs in Europe BICS supports & facilitates roaming agreement establishment between MVNOs and MNOs via the OC Roaming hub A major additional Inbound traffic opportunity for connected MNOs

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The new EU regulation details

Non structural regulation
New roaming regulation retails and wholesale price CAP enforced since June 2012 Roaming enforcement

Structural regulation July 2014

EU and BEREC continuing discussions to define the structural regulation that will come into force in July 2014 Roaming decoupling

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EU non structural regulation (July 2012)

New price CAPS MVNOs can ask MNOs for EU regulated roaming rates MNOs cannot refuse. Draft agreement in 1 month Fully operational within 4 months after contract signature
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EU structural regulation (July 2014)

Regulations encourages new entrants Roaming & home services can be contracted separately (3 Options under discussion) Opportunity for MVNOs to become the new roaming service providers

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Impact of new EU regulations

New EU regulations create major opportunities for MVNOs More MVNOs are due to arrive on the European market

MVNO roaming creates an inbound traffic opportunity for existing Mobile Operators Roaming Hub will have a major role to play

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The value proposition for MNOs

Opportunity to terminate inbound MVNO roaming traffic from BICS customers on your network Traffic volume opportunity for MNOs BICS takes the financial liability No financial risk for MNOs BICS is in charge of IREG/TADIG testing Limited MNO resources required Cost for MNO is a revenue share model No cure , no pay

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BICS hybrid roaming

Bringing value to MNOs & MVNOs

MVNOs need MNOs to terminate roaming traffic MNOs can increase revenue by engaging with MVNOs Constraints - resources, time & roaming skillsets BICS can deliver Instant Roaming coverage to MVNOs BICS can offer a gradual transition towards home IMSI roaming by connecting MNOs to MVNOs on the OC Roaming hub

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MVNO roaming optimisation

Bilateral Roaming
Dual IMSI Roaming Hub

Single IMSI Roaming Hub

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Instant Roaming hub (Multi-IMSI)

Reuse agreements of a sponsor operator
MNO 4

MNO 2

MNO 3

MNO 1

Requires a SIM applet to manage IMSI swap

Home IMSI

OPX

Sponsor Operators

MNO 5

Multi IMSI SIM

Sponsor 1 IMSI
SIM Applet

OPZ

Sponsor 2 IMSI Sponsor Z IMSI

Worldwide Coverage
Voice/SMS CAMEL - 3G

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Instant Roaming hub advantages

One single step to enable global roaming
MNO 4

MNO 2

MNO 3

MNO 1

Best approach for MVNOs & new entrants All services supported : Voice, SMS, Data & CAMEL

OPX

Sponsor Operators

MNO 5

Attractive IOTs Transparent for end user: same MSISDN and seamless user experience

OPZ

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OC Roaming Hub

MNO 6 MNO 5

Open Connectivity Roaming hub is a GSMA initiative One single connection provide access to many roaming partners 1 contract, 1 bill, 1 payment for many roaming relations Using home IMSI Peering enable connection to customer of other roaming hubs

MNO 2

MNO 3

Peered Hubs MNO 4

MNO 1 Roaming Hub

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OC Roaming Hub Advantages

MNO 6 MNO 5

IREG and TADIG testing performed by the roaming hub Financial liability taken by the roaming hub Billing, invoicing, settlement by the roaming hub IOTs discounts

MNO 2

MNO 3

Peered Hubs MNO 4

MNO 1 Roaming Hub

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Hybrid roaming summary

BICS Hybrid Roaming

Multi-IMSI Relationship MVNO OC Hub Relationship MNO D BICS Multi IMSI BICS OC Roaming MNO E MNO F
Hub Peering

MNO MNO MNO MNO MNO MNO MNO MNO A A A A MNO MNO MNO MNO A A A A MNO MNO MNO MNO A A A A W X Y Z

Roaming Hub B

MNO G MNO H

Multi IMSI roaming hub is used to provide global roaming around the world 1 Step global roaming

As the traffic grows, OC Roaming hub is used to enable roaming with home IMSI to provide better IOT rates bring user experience to perfection

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Conclusions

Conclusions
MNOs and MVNOs mutually benefit from engaging with each other Business constraints prevent them from doing this BICS offers seamless solutions to make this happen rapidly BICS encourages MNOs to connect to the OC roaming hub & dual IMSI hubs to receive significant MVNO minute volumes

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Thank You!
@BICSEvent mentioning: #WS_roaming
Stephen Breen Head of Roaming - BICS stephen.breen@bics.com + 353 87 11 6 10 10

Opportunities & Future Planning

Differentiators 1) Retail Pricing 2) Customer Care 3) Billing Flexibility Growth Opportunities Hardware/Device companies offering Data services (More & more embedded SIMs & M2M Opportunities) High street retail stores (This is a risky area as SIM Swapping dominates e.g. Ethnic MVNOs & Pricesensitive subscribers) WiFi Offload M2M
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