Mobile-First Businesses Creating Demand for Data-Only MVNO Model

Convergence Corner

Mobile-First Businesses Creating Demand for Data-Only MVNO Model

By Erik Linask, Group Editorial Director  |  June 02, 2016

Anywhere, anytime... it’s the way today’s mobile world works. To be clear, that is not saying everywhere and all the time, but the idea is that we are infinitely more mobile than we were just a decade ago and, as a result, must also be accessible.

Most of that accessibility and the communication and collaboration that go with it comes in the form of something other than voice communications. With access to so many other convenient services and applications, we are (hopefully) finding ways to work more efficiently as well.

As a result, however, we’re chewing up more bandwidth than ever before, much of it a result of video consumption (we know full well about the increase in consumer video use, but business video production also on the rise, especially for marketers). 

Often, the next conversation moves toward the challenges created by all this massive video creation and consumption, but there are also opportunities that have arisen, such as a new breed of data-only MVNOs targeting the business market, like DataXoom.

DataXoom provides mobile data services for businesses. In addition to seeing a real need for enhanced data services, the company views this as a significant opportunity for its channel, which will be able to leverage today’s mobile-first mentality to create new, recurring revenue streams.

Founded in 2012, DataXoom was ahead of the market initially. This was despite general consensus the market wouldn’t support separate vendors for connectivity and devices. DataXoom moved forward, believing its model would benefit the national carriers as well as businesses, which would be able to capitalize on their data-centric business models while controlling spend.

I recently spoke with DataXoom co-founders Chris Hill (News - Alert) (CEO) and Rob Chamberlin (chief revenue officer). As Hill explained: “the consumer model is that everything now is sponsored and the consumerization of mobility is growing rapidly. We are really the antithesis, and that’s what the channel wants.”

DataXoom’s multi-carrier offering allows partners to deliver customized mobility solutions to each customer, without activation and termination fees or device subsidies, all of which cost consumers a pretty penny. In fact, business customers can select pay-as-you-go plans, or purchase pools of data –  whatever suits their needs. And because there are no penalties, they can change their plans as needs evolve.

Its online portal is designed to make deals easy for partners, including some TEM elements to help keep costs controlled. 

“The single value-add, though, is the experience we give our customers,” says Hill.  “Customer experience is it for us, and that’s what we deliver; pricing is important, but it’s gone far beyond that.”

That customer is the business with data-based applications that are core to their operations.  Importantly, DataXoom is not targeting those businesses with groups of people all doing different things – it’s all about the data.

The enterprise-focused MVNO model is beginning to grow, as usage of data devices continues to climb.  It’s not uncommon today to see more than 1,000 tablets each averaging 2-3Gb, in any number of vertical markets. These businesses have carrier agreements for their phones, but likely would see value (and cost reduction from using a data-only MVNO for data-only devices and users). 

The challenge now, according to Chamberlain, is to educate the market – and the channel, which has not been as quick to adapt to a recurring revenue model as one might have thought it would.  While many businesses have recognized the benefits of having a multi-carrier, data-only provider, others haven’t bought into the model, even though the data runs through a single vendor with a single bill (one throat to choke, simplified billing and management). Effectively, it doesn’t matter who the carrier is, or if a business uses multiple underlying carriers for its different users to accommodate preferences or geographies. And, it works with a BYOD strategy so businesses have the option of choosing and providing devices, giving employees a choice of corporate-owned devices, or allowing them to purchase and use their own.  

While consumer MVNOs have been hit or miss (more miss, traditionally – remember ESPN (News - Alert)?), DataXoom’s business-specific model is founded on providing not only a service that will benefit businesses, but with a service commitment and existing channel relationships to match. It would be surprising to not see this market grow.




Edited by Stefania Viscusi
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