Failed MVNOs – Not so Easy, EasyMobile MVNO (2008)
The EasyGroup brand values, as taken from easy.com:
1 - Great value
2 - Taking on the big boys
3 - For the many not the few
4 - Relentless innovation
5 - Keep it simple
6 - Entrepreneurial
7 - Making a difference in peoples’ lives
8 - Honest, open, caring and fun
…so why after following those values did it go wrong? Why did the Easy strategy not work in the European MVNO market? This thought piece looks to investigate and raise questions, but in no way seeks to provide the definitive answer.
1 – Great value
Without a doubt the price was right but the value market had already been taken. For the same price the leading UK retailer offered mobile services in conjunction with its incredibly successful loyalty-points scheme. The same loyalty scheme is an ongoing success story in the UK; Tesco Clubcard points can be turned into money off at the till, free days out or into AirMiles amongst other things. Spending on an EasyMobile did not translate into anything but the service provided. Given that the price conscious users churn from offer to offer what was there to make them churn to EasyMobile from another budget offer?
2 – Taking on the ‘big boys’
There is nothing wrong with competing head on with the big players when you are on equal grounding, but an MVNO is not. At least one of those players indirectly owns the MVNO operation and its customers; whether contractually or just because the MVNO uses their network, the MNO still has ownership. It also does not help if the brand is the colour orange and a falling out with a carrier called Orange occurs.
The problems for EasyMobile kicked off when the relationship with KPN turned bad. Each side accused the other of failing to fulfil their obligations and the plug was pulled in the Netherlands. A similar scenario had unfolded within the other EasyMobile MVNOs and soon followed the demise of all EasyMobile operations.
You can not go head on against MNOs when they have control.
3 – For the many not the few
EasyMobile was an online only venture. The price made it financially accessible to the majority of consumers. However, not all consumers are prepared to shop online and added to this is a history of bad customer service within the mobile market place. When shopping in a problem area consumers want a person they can go to and force to deal with their complaint when it does go wrong.
4 – Relentless innovation
There was nothing new about MVNOs or cheap pay as you go SIM cards in Europe. In fact, with 3G and various mobile data services it was more often the case that MVNOs were basic offerings when compared to all singing and dancing MNOs’ offerings.
5 – Keep it simple
This they did and they did it well. Flat pricing, online ordering and online only customer service, blanket use of the colour orange on their marketing, a SIM only operation … maybe it was just too simple. For the same price more complex offers with greater value add could be had elsewhere. It would also be reasonable to suggest that the average mobile user generating a worthwhile ARPU is pretty adept with voice services, SMS, MMS and potentially some Crazy Frog and ring back tones thrown in. Not available on EasyMobile as it was simple.
6 – Entrepreneurial
The key factor about being an entrepreneur is that you need to be the first or you need to bring something to the market which no one else can. EasyMobile brought EasyGroup to the mobile market but that seems about it. For the UK, pay as you go had existed for decades already, online vendors were already well placed, cheap calling and text was already on offer to the masses and additional services offered by MNOs out shone the glow of Easy orange.
7 – Making a difference in peoples’ lives
… it would probably be stretching it a bit to think a low lost mobile service really did this, other than on a financial basis.
8 – Honest, open, caring and fun
Well it was, until the lights went out.
The purpose of this brief has been to give some insight into the MVNO market, specifically why some MVNOs fail.
This is by no means a thorough analysis of the market and was authored in 2008.
See also The MVNO Directory