The history of virtual operators in Russia started 10 years ago when Corbina Telecom started to sell telecom services using Vympelcom DAMPS network infrastructure. Now these companies have merged, and MVNO projects in Russia can hardly be called successful. The reasons of it hide in the fact that national operators, opposite to foreign colleagues, can’t stand competition and are not ready for infrastructure sharing.
One of the major competitive advantages MVNOs use to attract clients is low price for one network p-to-p communication, but “traditional” operators also offer this opportunity. That is why only few operators can be called comparatively successful, for example MVNO of Avon which worked in Easter Europe and united distributors of the company products.
In 2007 the largest mobile devices distributor Euroset trumpeted the first Russian MVNO creation. They managed to negotiate only with regional operator SMARTS, and soon, having gathered less than 10 thousand subscribers base the operator disappeared. Official version is that Euroset abandoned the project in order to concentrate on the main business. In 2007 Igor Nalivaiko being SMARTS commercial director explained that Euroset SIM-cards sold poorly due to the absence of motivation of sales managers. SMARTS paid higher incentives for new subscribers than Euroset did.
Conflicts of interest during MVNO launches constantly happen in Russia. Having launched in 2009 the project “Just speak” Megafon operator did not expect that the demand for the tariff with such a low calls charge rate would be so high. Having subscribed 600 thousands “Just speaking” subscribers the operator limited sales, and if before the tariff contract can be bought at any press booth at the subway, that time it could be found perhaps just in specialized sales offices.
"In 2010 total monthly voice traffic increased by 30% and last year monthly revenue from January to December increased almost twice, — says Megafon press-secretary Tatyana Ivanova. We managed to increase these using so cheap rates subscribers’ revenue by raising our prices for all other services. For example the price of one Megabite of transferred data for “Just speak” subscribers is 10 rubles, and, taking into account that every 0,1 Mb is billed, every internet session costs modern smartphones owners at least one ruble.
Few pseudo MVNOs serving niche clients are operating on the basis of Megafon network. Matrix Telecom since 2003 offers connection to mobile network for unique unlimited tariff rates, aimed at those making many distant and international calls. Kantrikom, JSIC acting under “Allo Inkognito” trademark offers intellect-based services and advanced call recognition to clients. Gars Telecom concentrates on corporate clients offering convergent services that allow transforming mobile phone to office one with all office functions.
MVNO is the most effective only when it is oriented on niche consumers united by some characteristics. MTS first MVNO experience was cooperation with A-one TV-channel in the framework of which tv audience was offered to subscribe to a unique “Alternativa” tariff plan. The subscribers enjoyed the discounts for the tv-channel interactive services, invitations for concerts and free MMS. Having tasted MVNO MTS repeated the cooperation with Auchan retail network. Now according to MTS press-secretary Irina Osadchaya, 127 thousand subscribers use this “A-mobile” tariff.
The first classic in terms of process organization MVNO can be called “Alle” project realized on summer 2010 by MTS and X5 Retail Group. X5 controlled supermarkets consumers can subscribe to the operator. Tariff construction, client service and promotion is conducted by a partner, while MTS provides its infrastructure and billing. MTS does not enclose MVNO “Alle” subscribers’ base but the operator plans to make 200 — 250 thousand subscribers in the first year.
Comparable advantage of MTS virtual operators is special offers for the subscribers. In the frames of “A-mobile” subscribers get free minutes to call to the other “A-mobile” subscribers, while “Alle” subscribers can exchange bonuses saved in X5 Club program to minutes and other operator services.
Megafon and MTS estimate their MVNOs as successful ones. “Our experience shows that the project is successful when it is build as a niche offer, well-designed and corresponding to target audience needs”, — says Irina Osadchaya. “Lack of development in this side of business is due to market situation when mobile operators’ brands are obvious leaders in the minds of consumers and enjoy the highest level of trust, — emphasizes Tatyana Ivanova. — We are satisfied with mid-term results of ‘Prosto’ project and have no plans on its abandonment or sale”
Every year “below big three” operators announce close launch of MVNO. The farthest in this regard is Sky Link, which since 2008 has been developing co-operative with Centrtelecom project. In the frames of the agreement Centrtelecom subscribes the clients to their own CDMA network using Sky Link brand. Sky Link CEO Gulnara Hasanova said at the meeting devoted to the project launch: " Centrtelecom will build a network, we will rent it and get traffic fee from them."
For their history Russian MVNOs proved that there are two ways to become really successful virtual operator in Russia: either offer low prices or offer unique benefits for the clients. The experience shows that only operator itself can offer low prices, so the future is in retail networks.