Lycamobile CEO Milind Kangle ended a speech on Monday with the message that he wanted to work more closely with mobile network operators, but began it by saying they were also slowing his company down.
The gist of Kangle’s beef with MNOs is that they are overly large businesses with well-established roadmaps and different development cycles.
By comparison, MVNOs are different beasts that move more quickly.
In particular, the CEO, who was speaking on day one of the Telecom World Congress in London, said that the big MNOs have to streamline.
“I think some of them can cut their workforce by up to 50 percent,” he said.
This seems rather optimistic; as European Communications reported earlier this year, ratings agency Moody's said BT was the European operator with the scope to cut its staff.
Further, Kangle believes that operators will need to evolve their business models in order to compete with the OTT providers.
“Our competition in the coming years will come from Apple, Skype, etc,” he said.
In a follow up conversation, CMO Chris Liveing declined to expand on how else Lycamobile – Europe's largest MVNO - would like to see MNOs change.
“That’s for them to recognise,” he said.
Any criticism is tempered by the fact that his own company is very reliant on MNOs.
It is a difficult balancing act.
Kangle was very keen to point out that his company has “full control over its own destiny” – largely due to the fact that it has built its own tech platforms – but the one thing it doesn’t have is a network.
Consequently, Lycamobile has several partnerships with European MNOs such as Vodafone, with whom it works in five countries.
“We want to work more closely with MNOs – we can add real value to them through wholesale partnerships and a focus on segments they don’t focus on,” said Kangle.
Lycamobile has over eight million customers in 14 countries – mainly ethnic minority groups who want to keep in contact with families in their homelands.
It is growing fast and has stats that established operators can only dream of - a new customer joins every four seconds.
The CEO said he expects that stat will double when Lycamobile launches in the US later this year.
Liveing said there was “significant pent up demand” for their services in North America but declined to share what targets they were aiming for.
As a privatey-owned business, keeping figures close to their chest is something Lycamobile is renowned for.
Kangle said the company was in “geographical expansion mode” as “whoever is first to market [in the MVNO space] is going to be the winner”.
He thinks Lycamobile can get a lot bigger, but to enable it to do so the CEO clearly wants MNOs to be successful too.
Ironically, as the MVNO itself gets bigger, it will undoubtedly come into the similar sort of problems that MNOs are facing.
But while this is a way off yet, MNOs are showing they are learning the lessons of focusing on very specific focus distinct customer groups.
For example, last year Turkcell launched Turkcell Europe in Germany aimed at the Turkish expat community there, while France Telecom-Orange launched digital brand SOSH that is aimed squarely at the youth market.
Lycamobile has proved that it works, but their CEO is right that MNOs have a long way to go to match their success.
Photo: JP&C Photography