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I was chairing a day at the Informa MVNO Industry Summit 2008 in Barcelona this week. The discussion focused on how operators and MVNOs can best work together.

Being Blyk - a youth media – puts us in an interesting position. Through connection to preferred brands, Blyk provides more value to youths compared traditional mobile offerings. In fact, Blyk is in a league of its own with the ad funded business model. As a result, most analysts have difficulty fitting Blyk into their MVNO positioning frameworks. Why is that? Because Blyk Media is not an MVNO, although it happens to have operator capabilities in order to serve young people.

Also, many people in the telecommunications industry see mobile advertising similar to the advertising model in Internet – the place to create a high number of impressions and eyeballs for a campaign. On the contrary, mobiles are used to interact and communicate, therefore being a place to engage and build relationships between brands and consumers. It is the most personal media for people, and thus not a natural place for broadcasting.

Another major question discussed during the summit asked “how are MVNOs doing today?” Informa’s Mark Newman shared some statistics that would suggest that MVNO’s are doing quite well: Western European MVNOs have grown subscribers between December 2006 and February 2008 from 40 million to 55 million, which is over 35% in 15 months. In the UK, Spain, Germany and France, MVNOs averaged to 30-40% of net adds (a term that mobile industry uses for new customers) every quarter in 2007.

From an industry point of view, specifically interesting is the wave of MVNOs starting from Northern Europe in early 2000, moving first towards Central Europe a few years later, and now reaching to the south and east. William Barrar from Ovum presented an interesting model. A market becomes ready for MVNOs when: mobile penetration is high; cost to acquire one new customer for operators passes a certain threshold cost; and when revenue generated by one customer is high enough and stops growing.

And what makes an MVNO successful and the relationship with operators work? This was the topic at the Crystal Ball Panel – where champagne was served – at the end of the conference. The panel included Keith Greenfield (Orange UK), Markus Freikamp (T-Mobile International), Dan Armstrong who has been involved in 22 MVNOs (Rabo Mobile), and the undersigned. The panel summarised the two days well: in order to succeed, one needs to create a special relationship between mobile service and the consumer, on top of the economically attractive offer that is the entry ticket for creating the relationship.

All in all, it was two days well spent. Thank you to Informa, all presenters and the active audience.