Mexican MVNO Miio Launches with Free Monthly Plan

A new MVNO called Miio has been launched in Mexico with a free basic service along the lines of that previously offered by FreedomPop, according to a report. The service, called, Saldo Free, comes with 50 MB of data, 100 minutes of calls to Mexican fixed line numbers and 10 SMS a month. Users need only acquire a SIM card for MXN 30.00 (US $1.61) and download the operator’s app (available in versions for iOS or Android) to access the bundle. Miio’s out-of-bundle rates are MXN 0.85 (US $0.05) per minute, per MB of data and per SMS. Credit will only be used after the free bundle has been consumed and can be topped up via the corresponding Miio debit card at any Oxxo store in Mexico.
 
U.S.-based FreedomPop, founded in 2011, has had success with its MVNO model, based on an introductory level of service offered without charge and higher levels that are paid for and drive revenue to the operator. FreedomPop has expanded within the U.S. and in 2016 entered the Spanish market and the U.K.
 
In Mexico, the “free” service idea is attractive for a number of reasons, including the fact that it is a relatively budget-minded market with a large number of users who still have a lot of room for growth in terms of data utilization. As of the end of 2017, the country had a total of 14 MVNOs at the end of 2017, accounting for 1.48 million active SIMs, for 1.3 percent of the market. That was up 68.7 percent compared to the end of 2016. The Mexican market, therefore, is far from saturated when it comes to MVNO penetration.
 
With Miio, the main issue is, will enough users not only sign up but use more than the allowances and continue with the service? It seems to us that the allowances are relatively small, perhaps too small, to give users a real sense that they have indeed gotten a “free” service at all. The fact that the only included voice calls are to Mexican landlines could be a deal-breaker, and while SMS are never expensive, an allowance of only 10 per month is so small as to approach meaninglessness. And in an era of streaming content and other data-intensive functionalities, 50 MB per month is also very low indeed. It is possible that very small allowances might be satisfactory to introductory-level users who are newcomers to any data use, but if there are not enough of these users, Miio may face consumer rejection unless it ups its numbers.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

FreedomPop Launches Low-Data Offering for Small Businesses

U.S. MVNO FreedomPop said that it has launched the first free phone service for small businesses. The plan offers unlimited talk and text, plus 2 GB of shared data for the first two users on the plan. Businesses with more robust data needs can purchase more data starting at US $10.00 per gigabyte. In addition, FreedomPop is also launching what it calls the world’s lowest-cost IoT mobile connectivity platform. IoT devices can now connect to FreedomPop’s global wireless network starting at US $1.00 per month.
 
With the huge proliferation of plans offering more and more data, not to mention unlimited plans (real or in name only), it is somewhat surprising, or at least counter-intuitive, to see an operator offering a minuscule amount of data. Nonetheless, FreedomPop has always defined itself against the crowd, having made its name outdoing the budget MVNOs with packages that are literally free. It makes its revenue from overages and from paid services that it offers as customers upgrade.
 
In this case, FreedomPop is offering a service package tailored to the needs of small businesses whose mobile devices are used much more for voice and texts than for data. The allowance of 1 GB per user per month could be quite appropriate in such situations. If the small businesses change their minds and need more data, they can purchase more through the plan.
 
The IoT platform is also a boon to small businesses, and can be expected to increase in appeal as more and more devices become available. A very low-cost IoT plan through the MVNO could be very attractive to small businesses and afford a seamless way to get involved with these new technologies and discover their potential.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

FreedomPop Spain to Deactivate Its 3G Service

MVNO FreedomPop Spain has informed its customers that anyone who has not yet acquired a new SIM card, at a cost of €4.99 (US $5.96), to migrate to its new 4G/LTE service will be disconnected from its existing 3G service on 1 September. FreedomPop’s decision comes after it partnered with Spanish telecom group MásMóvil to offer its customers 4G services over the network of Yoigo, MásMóvil’s MNO brand. Users have the choice to port their numbers over to the new 4G platform via the new SIM, or to any other operator’s network.

FreedomPop, a U.S.-based MVNO, launched service in Spain a year ago, offering—for the first time in Spain—a free-of-charge plan that included 100 minutes of calls per month, 300 SMS, 200 MB of data and unlimited access to WhatsApp. The new basic plan is still free, but it no longer comes with data-free WhatsApp use or international roaming. The offerings of the company’s four other so-called premium plans start from 1.5 GB of data, 500 SMS and 200 minutes of calls for €4.99 (US $5.96) per month and range up to 10 GB of data and unlimited calls and SMS for €28.99 (US $34.63) per month.


This move on FreedomPop’s part represents a maturation process in Spain, a developed yet relatively budget-conscious European market that has seen an upsurge in MVNO entries. FreedomPop’s move to Spain in 2016 evidently came at an opportune time, and the MVNO itself has matured to the point where it was appropriate to make the transition to 4G/LTE.

The high-speed service is now the worldwide standard wherever mobile data is needed, and for even an aggressively budget-oriented MVNO to end 3G is a strong indication that the legacy service’s days are numbered in developed economies. And with the rise in popularity—and necessity—of data-hungry apps and services, customers have greater incentive than ever before to migrate to 4G.

So in doing a deal with Yoigo to get access to a 4G network, FreedomPop is offering higher quality while remaining true to its roots as a disruptive force in the marketplace by still offering free service. However, the difference now is that with the free basic plan, unlimited WhatsApp and international roaming are withdrawn, which leaves the customer who uses these services with the choice of either reducing data use or moving up to a paid plan. This is generally the end game with offerings of free services in any case, with operators hoping that customers who have become accustomed to using a certain level of services at low or no cost will become habituated to doing so and then after a while will be willing to pay for them. In addition, FreedomPop is making the reasonable assumption that its slate of non-free offerings with much larger amounts of data will be palatable to Spanish prepaid consumers at least in part because of the fact that they are being delivered over 4G/LTE. 

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

Redefining a Mobile Service Provider

There is a paradox at the heart of the mobile telecom industry. Despite skyrocketing data use and proliferation of connected devices, the industry is facing a structural crisis that raises serious questions about its sustainability and growth. With mobile penetration rates in almost all markets well above 100 percent, competition among MNOs has grown fiercer and more focused on price reductions. Traditional sources of revenue have been undercut by OTT services such as WhatsApp and Skype. The increase in consumer data usage has been a mixed blessing in that it has placed pressure on operators to make expensive improvements to the capacity and coverage of their networks. Finally, national regulators have become increasingly activist with regard to pricing, M&A activity and service requirements, further increasing costs for providers.

In the face of this paradox—increasingly large amounts of money flowing through the mobile industry while operator revenues grow ever flatter—we expect to see new business models, revenue drivers, pricing strategies and even leading players. Ultimately, the results of these changes could be the redefinition of the term “mobile service provider.” We have already begun to witness the first steps of this process. MNOs have worked to reevaluate their core offerings in order to find new sources of revenue or to reduce churn. The defining trait of 2014 was MNOs’ drive to acquire the infrastructure needed to offer converged packages. Operators around the world—but particularly in the hypercompetitive European markets—pushed to lock in customers and raise monthly spending by offering quad (mobile, fixed voice, broadband and cable television) packages. Further, non-core value-added elements like Spotify, Netflix and other content-driven services became increasingly important in plan construction, forcing operators to branch out into new partnerships and ventures.

A dramatic recent example of this occurred in the U.S. with Verizon’s US $4 billion acquisition of AOL—a play to secure AOL’s mobile ad software, more proprietary content and new revenue streams in an increasingly competitive market. This type of news is an illustration of how the distinction between content creators, information aggregators, device manufacturers and service providers continues to grow blurrier. Just as we expect mobile operators to be packaging more non-traditional features in with their mobile packages, we believe that there is an opportunity for other types of companies to enter the mobile services space and use these services as a way to augment their traditional packages.

With Facebook’s acquisition of WhatsApp and Google’s ever-expanding reach across all realms of digital life—including its recently launched U.S. MVNO running on the Sprint and T-Mobile networks and its discussions with Hutchison Whampoa for international expansion—we would not be surprised to see either of these entities begin to pivot increasingly into mobile service as an add-on to their traditional offers. While projects like Google Loon/Fiber and Facebook Zero made headlines before retreating from the industry consciousness, the economic conditions that initially drove these initiatives remain—giant internet content providers that have significantly higher margins are growing impatient with mobile and broadband providers’ ability to connect their potential customers. Further, MVNOs like FreedomPop are experimenting with new business models like ad-based data sales. Finally, whether through mesh networks, ever-expanding Wi-Fi hotspots or new technology solutions, MNOs’ hegemony over mobile data is likely to be challenged in the coming years. The high and growing demand for large volumes of fast data makes the industry a prime target for disruption if an adequate alternative presents itself.

There are so many variables in play that it is impossible to make a firm prediction as to the precise long-term evolution of the industry. However, this much is certain—for MNOs to be successful in the future they will have to be adaptive and flexible in terms of developing new revenue streams and fending off non-traditional rivals. Maintaining outmoded plan structures and customer acquisition strategies will almost inevitably lead to painful disruptions. The current structural and competitive environment have the potential to change the core MNO business model in a way not seen since the launch of the iPhone in 2007 and the beginning of the mobile-data revolution. As such, strategic choices made by operators in the coming years will have an outsized impact on the future of the industry as a whole.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Click here to contact a Tarifica Analyst

Tarifica Alert - Google Launches Project Fi Mobile Service

Google has announced plans to launch its first mobile phone service as an MVNO, providing wireless connectivity to mobile customers through a blend of Sprint, T-Mobile and Wi-Fi networks. Called Project Fi, this service will first try to route traffic over Wi-Fi, drawing from a database of over one million Wi-Fi hotspots, and then, if necessary, will hand traffic over to either Sprint’s or T-Mobile’s network, depending on which happens to be stronger in the given location. Google will charge US $20.00 per month for unlimited calls and SMS, Wi-Fi and international coverage in over 120 countries. Data in the U.S. and abroad will cost US $10.00 per gigabyte, and Google will refund customers at the end of the month for any data not used. The service will launch in the U.S. and will initially be available only to customers with a Google Nexus 6 smartphone.  Project Fi’s model of routing calls over Wi-Fi networks first and then over the traditional cellular network is not a new one; Republic and FreedomPop, among others, have been exploring this business model for several years, with mixed success. Needless to say, with their budget-conscious customers numbering in only the hundreds of thousands, these small MVNOs will not be threatening the business model of the MNOs anytime soon. However as Wi-Fi hotspots become more ubiquitous, and larger players like Google jump into the game, we think that the MNOs will begin to feel the pressure, as higher-end customers (the Nexus 6 costs roughly US $649.00) also begin to experiment with plans that can significantly cut their monthly costs. As we have noted before, Google’s core business is based on generating ad revenues from massive collection of internet data. As such, Google’s goal is to push the entire industry toward a model where data is cheaper and more plentiful. When Google announced its plan to expand its high-speed fiber network in several U.S. cities by offering cheaper and faster broadband than the incumbent operators, they put pressure on those operators to follow suit, affecting broadband speed and prices in those cities. Google’s entry into mobile services as an MVNO using Wi-Fi first will likewise put price pressure on the MNOs, and this will undoubtedly benefit Google’s core business, as well. There are many reasons why this effort will stay small before it picks up speed—lack of broad device support, especially for popular high-end devices such as the iPhone and Samsung’s Galaxy phones, as well as reluctance on the part of many high-end consumers to rely on T-Mobile and Sprint for backup coverage, to name a few. That said, we think Google’s gentle pokes and pushes at the structure of the wireless landscape will inevitably serve to reshape that landscape.   Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Tarifica is a division of T3i Group, a diversified telecom information provider. To learn more about Tarifica, please visit www.tarifica.com. We are pleased to announce that subscriptions to The Tarifica Alert will now include 5 hours of analyst support. This additional support will enable you to work with Tarifica’s team of experienced researchers and analysts to: Get follow up information on a noteworthy story or important topic of your choice Discuss promotional and plan trends occurring in a country, a region, or around the world Leverage the Tarifica Mobile Database to collect specific plan information from any of the more than 300 operators that we track globally Examine historical data to illustrate the evolution of plan costs and service inclusions Gain insight into the innovative strategies being used by successful operators to facilitate growth Learn more about any telecom plan and pricing topic The Tarifica Alert is a comprehensive weekly publication that covers 10-12 stories and trends in the telecom industry with a special focus on plans, pricing and promotions. To read this week’s issue, please click here. We hope you enjoy this complimentary issue. If you have any questions, or would like to subscribe to The Tarifica Alert and receive these insights every week, please click here to contact our Managing Editor.

FreedomPop Launches Wi-Fi Service

FreedomPop, an MVNO based in Los Angeles, CA, has launched a low-cost Wi-Fi service that gives users unlimited use of 10 million hotspots across the U.S. for US $5.00 per month. This service dovetails with FreedomPop’s core business model of offering free and very low-cost stripped-down phone plans over the Sprint cellular network; accessing Wi-Fi for most of their needs allows FreedomPop customers to stick with a very bare-bones cellular plan for the remainder of the time when Wi-Fi service is not available.

Republic Wireless, based in Raleigh, NC, is another MVNO offering low-cost phone service that primarily relies on Wi-Fi networks, pulling signals from cell towers only when Wi-Fi is not available. For US $10.00 per month, Republic Wireless offers a plan that moves calls seamlessly between their Wi-Fi network and Sprint’s cellular network, using a special technique developed by their parent company, Bandwidth.com.  Alternatively, for only US $5.00 per month, consumers can make calls and connect to the internet solely over Wi-Fi.

While these Wi-Fi-centric phone plans are not going to put cellular network providers out of business anytime soon, clearly there is a shifting dynamic taking place. Wi-Fi speeds have increased by orders of magnitude over the last 10 years. We are not surprised that MNOs are offering Wi-Fi hotspots to complement their mobile phone service.  And as more and more hotspots are built in U.S. cities where high-speed fiber optic cable networks are being installed, it is easy to imagine that accessibility to Wi-Fi will at some point be fairly ubiquitous, especially in urban areas. Last month Cablevision announced a phone plan powered entirely by Wi-Fi for US $30.00 per month, and Google is reportedly working on a cellphone service that relies heavily on Wi-Fi. 

 

“As large carriers as well as MVNOs begin to push more traffic onto Wi-Fi, it may be just a matter of time before a robust Wi-Fi network is available across the country and cell towers are relegated to the role of backup service.”

Beith Teitel, Research Analyst at Tarifica

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx