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Thursday, April 27, 2006

Enterprise MVNOs are coming - new $200m VC fund

Yesterday I attended part of a major conference on MVNOs. I was speaking on a panel session about the role of MVNOs in the emerging FMC space. The bottom line was "not very much, to be honest", unless they have strong skills in procuring & customising dual-mode handsets, or unless you take a broader view of FMC to include picocell-based services.

For me, the most interesting comment came from Michael Mandahl, a partner at VC Brainheart Capital, which has a variety of interesting wireless investments. As well as representing Swedish "indoor operator" SpringMobile (which is also one of the new UK licencees), he also announced that Brainheart is starting a $200m fund specifically targeted at financing enterprise-centric MVNOs.

I think this makes a huge amount of sense. I have long held that existing mobile operators don't "get" enterprise. They don't understand IP, they don't understand IT (many of them outsource their own...), and they certainly can't grasp the fact that PBXs, especially IP-PBXs, are here to stay. Often, they also lack sales and marketing teams that can sell anything other than minutes and BlackBerries (usually with the help of RIM's own sales team). How many CIOs have their mobile carrier's account representative on speed-dial, or play golf with them (OK, that's a rhetorical question).

Enterprise MVNOs are no-brainers. Ideally, they'll be companies with existing strong enterprise relationships. Maybe PBX integrators (Damovo? Dimension Data?), maybe enterprise IT vendors & VARs (how about SAP? or Sage?) or integration/outsourcing companies (probably those that don't have other operators as clients).

I also feel entitled to feel slightly smug. In September 2003 I published a report on Multimode Wireless, in which I opined:

"Disruptive Analysis .... specifically envisions cellular-only operators enabling new classes of MVNOs (mobile virtual network operators). These will include broader service providers focusing on corporate multimode mobility services (EMSPs), as well as pure-play data-only MVNOs"

and

"Cellular operators face the tricky challenge of countering disruptive threats on the margins of their business, while avoiding cannibalising their core business in the near term. The clear risk is that the multimode space, while currently peripheral, sweeps in rapidly, to undermine the wireless mass market. Their current collective stance (with notable exceptions), is to attempt to delay it or produce “harmless” variants, rather than embrace it fully. While understandable, this brings its own medium-term risks, particularly losing out to MVNOs and EMSPs in the corporate space."

(Separately, and following on from my threat to name-and-shame, there was no delegate WiFi at all - free or otherwise, at the event. Poor marks to Informa for choosing the Cafe Royal in London as a venue, and a huge raspberry to the venue itself. I suggest other conference organisers steer clear, until it sees the error of its ways.)

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