To be viable, a virtual network offering must have an identity and a focused subscriber base. This supports the existence of the operator, a meaningful base on which to compete in a saturated market. Brand identity and subscriber identity will be closely related.
Many mobile virtual network operators (mvno) have been launched by consumer companies that sell the service to existing paying customers. In the case of a sports team, there is not quite the same type of paying customer base, but there is a strong fan base that can be converted into brand loyalty.
The soccer fan base in Brazil and Spain may well be enough to motivate a significant number of people to subscribe to a new MVNO.
In the following Guinea Mobile article we will look at the cases of the major soccer clubs that launched their MVNO brands in Brazil and Spain.
Brazilian soccer clubs launching MVNOs
At least eight Brazilian soccer clubs, in the A and B series, are offering mobile services under their own name, another six have signed contracts to launch providers by the end of April and five more are in negotiations, according to Valor Economico.
The trend has gained momentum since the second half of 2019 with licensing agreements signed by soccer clubs with MVNO Dry Company, which has some 350,000 customers.
The first to launch an MVNO was the Cruzeiro Esporte club who launched Crucerio Celular in July 2019 with coverage for all of Brazil, and made the soccer team the first in the country to offer the service. Clubs such as Bahia, Fluminense, Ceara, Vasco, Sport and Fortaleza also launched their mobile offer.
The telecommunications infrastructure available to fans served by Dry is provided by another MVNO, Surf Telecom, which in turn uses TIM’s mobile network.
Spanish soccer club launches MVNO
Spanish soccer club Real Murcia launched a new MVNO service called Movilgrana, which runs on the networks of incumbent operators Yoigo and Orange. Another soccer club that also entered the market is Real Betis Balompié, which launched its MVNO in partnership with Más Móvil in 2017.
What is really surprising is that MVNOs in Spain have been very successful with a social networking model, where users, especially young people, use the service to foster a kind of community. In this case, Real Murcia fans would naturally want to communicate with each other about games and other club-related matters. The MVNO could both facilitate and encourage that.
The importance of market segmentation for MVNOs.
As a business model, the MVNO has been shown to benefit greatly from relying on affinity groups. Unlike MNOs, MVNOs are small-scale businesses that have two main selling points: low price and tight focus.
Generally, MVNO offerings are targeted at fairly defined demographic groups, the youth audience being for example, because this age group generally needs plans and packages with limited budgets. Smaller groups that have been the target demographic for MVNOs include department store customers, ethnic groups, guest workers and even religious groups.
The idea is that affinity between people, in whatever form, is a definitive characteristic with built-in loyalties that can be exploited by a mobile offering. Not only does the MVNO get a reason for existence and a pre-existing customer base to start with, but customers have an already established sense of community that makes them want to stay in touch with each other through the mobile service.
Offers of lower rates or free in-network minutes are particularly persuasive when customers are affiliated with each other.
Soccer teams and their omv strategy
The prevalence of youth-oriented MVNO offerings is evidence of the inherently social and affinity-based nature of MVNOs. Many youth brands have sought to cultivate this quality by positioning the MVNO almost as an example of social networking, with promotions and activities tied to that.
Sports teams are another type of affinity group, a particularly strong one, in general. The passionate loyalties that fans have for their teams make it natural to extend a team’s brand to a mobile service brand. Not only will the brand name itself be a strong attraction for new customers to subscribe to the MVNO, but the very ways in which fans now participate in sports are intimately tied to the use of mobile devices.
One example is “second screening,” where fans use their devices to connect, get game-related information, and interact with other fans while the game is in progress. In general, fans of the same team will be more likely than average to want to communicate with each other about the game, and being a subscriber to a team’s MVNO would facilitate that.
The explosion of soccer-based MVNOs in Brazil and Spain attests to the appeal of this model, particularly in a country as soccer-obsessed as Brazil. The nesting ecosystem of MVNOs and enablers connected to TIM Brazil is up to the task and producing a large number of teamed MVNOs, and it only remains to be seen whether fan passions will turn to mobile subscription enough to sustain the market.
At Guinea Mobile we offer a white label mobile offering as a solution. That is, we provide everything from connectivity, omnichannel support and all our technology for companies wishing to sell mobile services under the modality of mobile virtual operator in Peru.