Tweakker eyes MVNO boom in next 5 years

- Tuesday, November 8, 2011

Tweakker eyes MVNO boom in next 5 years

Denmark's Tweakker, which provides cloud-based device management services to MVNOs, expects to see the same MVNO boom in Latin America over the next five years as Europe has experienced in the last 10, Tweakker CEO Dennis Juul Poulsen told BNamericas.

Tweakker announced last week its first Latin American deal, with Costa Rican MVNO fullmóvil, and is planning to expand throughout the region via a partnership it reached in May with French MVNE Sisteer.

Sisteer, which has an office in Brazil, earlier this year announced a new contract with Brazilian network operator TIM.

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"In Europe in the last 10 years, you've seen more than 500 MVNOs coming to market. I expect this number to double in the next five years, and a lot of those MVNOs are going to pop up in Latin America," Poulsen said. "You will also see in 2-3 years' time MVNOs starting to pop up in Africa."

For an MVNO to be successful, it needs to keep its customer care costs down. Poulsen said a customer care call to a traditional call center to set up a mobile data service can take up to 30 minutes, which could cost the MVNO US$10.

With its cloud-based service that takes the customer to a virtual menu and then sends a configuration code by SMS, Tweakker promises to save up to 95% of those costs.

Fullmóvil is one of two MVNOs that have set up in Costa Rica - the other being TuYo Móvil - as the market goes through a liberalization process. This week América Móvil (NYSE: AMX) and Telefónica (NYSE: TEF), which both won spectrum this year, have launched operations as network operators.

Poulsen believes that the time is right for MVNOs to enter Costa Rica's market, where penetration is still at 65% and new entrants that will compete with state incumbent ICE are just starting up.

He also said that unlike several years ago, the cost of devices has come down a lot with the introduction of Asian models, and customers do not necessarily need to opt for two-year, lock-in contracts anymore to be able to afford such a device.

And with the increase in smartphone use, customer care costs are going to rise for all operators, which Poulsen believes gives Tweakker an even better market opportunity.

"Smartphones can be so smart that the consumer doesn't know how to work them and needs to go to customer care service," he said. "That could mean an hour for them to solve a problem."

Latin America in general is also ready for MVNOs, Poulsen said, as many markets are reaching 100% penetration and operators could use MVNOs to target niches that they normally would lack the resources to go after.

Tweakker does not have any other specific Latin American markets in mind for targeting, but will rather go along with its partner Sisteer. But Poulsen believes that smaller countries will be easier to manage and be targeted first, before addressing the likes of Brazil.