Monetise your spectrum by partnerships to extend coverage profitably
MNOs make signification investments in spectrum as part of their licensing agreements with their regulators. It’s a heavy cost and one that needs to generate consistent returns. If coverage is easy to achieve, securing these returns is usually a matter of ensuring consistent service delivery and the provision of attractive services to as many paying customers as possible. The business case for MNOs in general is well understood.
To maximise ROI, MNOs need to be sure that they use their spectrum efficiently, which means ensuring the widest utilisation of spectrum in their territories. However, if service coverage is not easy to achieve, with the result that there are significant gaps, then there is a risk that spectrum is under-utilised. In turn, this will mean that returns are not optimised. If these gaps could be filled, then more efficient use of spectrum could be realised and more effective monetisation of investments could be achieved.
Worse, gaps in coverage, or “not spots” not only have a negative impact on sunk costs, but they also have social implications, denying mobile and internet access – and the economic and social benefits they can deliver – to citizens and businesses alike. Since MNOs often have the additional burden of the regulated obligation to deliver the widest possible coverage, “not spots” not only mean that maximum returns on spectrum cannot be attained, they may also lead to direct negative costs through fines for failure to deliver the necessary connectivity.
What can MNOs do? It’s easy to say that they must invest in delivering remote coverage to meet regulatory requirements and to ensure efficient use of investments, but this can have significant costs. As has been noted elsewhere, the incremental cost of extending coverage to remote regions can be high. Put simply, the more remote an area, the more expensive it has been to deliver the desired connectivity. Until now.
A different approach is to extend coverage by partnering with a specialist that can make selected investments and operates in a different regulatory environment. MVNOs can, by focusing on specific areas make the necessary investments through the use of an innovative solution, Vivada, that brings connectivity to even the most remote regions, profitably.
An MVNO sublets spectrum from an MNO and is not bound by the same regulatory obligations. MVNOs can be a vehicle for enabling the efficient use of spectrum in remote regions which helps MNOs meet obligations, increase ROI on sunk costs, while delivering the coverage and service demanded by those in hard to reach areas.
Our new White Paper explores this model and provides examples of the successful partnership between a MVNO that is focused on remote connectivity and its MNO host. It’s a win-win that delivers benefits to all. Find out how.