They have this thing they call mobile virtual network operators (MVNO) in the United States; I wrote about it last year. Typically, an MVNO enters deals with a mobile network operator (say MTN, Glo, Airtel, AT&T, Verizon) and acquires bulk access to network services at wholesale rates, then resells to end users. Most MVNOs use their own customer service, billing support systems, marketing, and sales personnel. You will think they are a full network operator, but they’re not!
The business works this way: in January you go to MTN to buy 1 million hours of call, 1000GB of data, 1 million SMS and MTN gives you 60% discount for that bulk purchase. You then open a business like Tekedia Telecoms and resell to the end users. You differentiate via customer service, pricing innovation, etc even though the core infrastructure and networks are powered by MTN.
Tekedia Capital is looking for innovators who are building around this domain in the Nigerian market. We understand that the telecom sector regulator (Nigerian Communications Commission) is giving licenses. We have great ideas on how MVNO could unlock massive opportunities through subscriber-based business models; one case study:
- Incentivize customers to go subscription in logistics, ecommerce, etc sectors, where paying subscriptions could unlock many benefits, including affordable data plans. Think of Jumia Prime subscription shoppers who also get cheap phone services from Jumia!
The playbook here is to execute a double play strategy (read how I explained it in Harvard here) where the MVNO may not deliver the direct financial rewards, but would accelerate value capture via other ways.
Tekedia Capital believes that startups within our portfolio can create GREAT PRODUCTS by using the telecom-based services for subscription-based customers, delivering superior customer retention and value capture over time. Yes, if you sign up for an annual subscription to use the Tyms Book accounting package, RoPay payroll services, OurPass agency network, etc, you can also get affordable data from a really great network service operator. Also, companies can do zero-metering more effectively, with subscribed-customers having the ability to use certain services even when they have no data!
Our Contribution: We will provide users and also business models, working with our portfolio companies. In some cases, we will pay in bulk for the data, etc. We have many companies in our portfolio, and we can work with the partner to design great products to unlock value in the market. If you are interested, please contact [email protected]. Our members can also explore investing in the MVNO if you have experience with a track record in this domain.
We’re not interested in it for data and voice calls. Rather, the focus is to use it to grow a subscription business across our portfolio firms.