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Strand Consult congratulates Telmore, as the mother of all no-frills MVNOs celebrates its 10th birthday

Today it is 10 years since Frank Rasmussen launched Telmore. Telmore is a shining icon on how to create a successful MVNO that in record time revolutionised the whole way mobile telephony is sold.


Telmore's results speak for themselves. Today, Telmore has a market share of 14 percent, 740,000 customers in Denmark, a significantly lower churn than the rest of the market and an annual turnover of over 1.131 billion DKK. The company has around 140 employees and is generating a handsome return on investment for their owners. Telmore is what you could call a cost efficient moneymaking machine, that only requires a few resources to achieve what many mobile operators can only dream of achieving. The Telmore concept is not only about inexpensive prices, but just as much about positive customer experiences and an extremely high level of customer satisfaction that you can read more about here:  http://www.strandreports.com/sw3716.asp

The story of Telmore is the story about how one man had a dream of making a difference in the mobile world by selling SIM cards and mobile traffic via the Internet, in the same way that airline companies and hotels today market and sell their services.

This is the story of how one small MVNO with very few resources, forced France Telecom to completely sell off their whole Danish operation - Orange Denmark, headed by Richard Moat - to TeliaSonera. A quick calculation of France Telecom’s Danish investments and what they finally sold their Danish business for shows that they most probably lost around 1 billion euro doing business on the Danish market - a figure that would have been significantly higher if Richard Moat and Morten Christiansen had not managed to create a turnaround for Orange Denmark.

In our report http://www.strandreports.com/sw658.asp, which we published the first version of in 2003/04 and that we have now sold to over 100 mobile operators, we describe in detail how the war between the two no-frill MVNO's Telmore and CBB initially changed the Danish mobile market and then spread across Europe to countries like Norway, Finland, Germany, Belgium, Holland and Spain, in what was then described as the "Danish Plague". In practice, the low-cost MVNOs did not only have a negative influence on Orange’s Danish business, but were also the reason for France Telecom selling their Dutch business to T-Mobile.

Through the years we have published a number of research notes based on our many reports about the MVNO market. In this research note we have summarised some of the most important facts and figures about the mobile revolution that Telmore and CBB created together in Denmark and how that revolution subsequently spread to the rest of the world.

In December 2003, we described how these discount and no-frills MVNOs were making life tough for the traditional operators: www.strandconsult.dk/sw695.asp and in this research note from February 2004 http://www.strandconsult.dk/sw747.asp we explained how Telmore and CBC with just two webpages as their only distribution channel were outcompeting the four largest Danish operators. Between 2H 2000 and 2H 2003, Telmore and CBB managed to acquire 43.7 % of all new Danish mobile customers and during the first 6 months of 2003 handled 42.9 % of all Danish number portings.

In 2003, Telmore had 450,000 customers in Denmark and turnover of 424 million DKK. After TDC purchased Telmore in 2003, TDC decided to internationalise their new acquisition. In early February 2005 I was contacted by one of my good friends Mark Newman, who had met with Stelios Haji-Ioannou from Easy Jet. Stelios Haji-Ioannou had a vision of creating a MVNO copying the Danish Telmore model. We met in Cannes in February 2005 where we discussed the possibilities and opportunities and where I also spoke at the 2005 3GSM conference. You can hear a recording of my presentation from that conference by clicking here: http://www.strandconsult.dk/sw1435.asp. The result of the meetings was a partnership between TDC and Easy Group, which you can read about here: http://www.strandconsult.dk/sw1053.asp.

The
fact that TDC's international venture was not successful was not due to any fault in the Telmore concept. A combination of too many TDC "suits" and a lack of local understanding of how to adapt the Telmore concept to individual markets resulted in Easy Mobile never achieving the success that it potentially could have. As you probably know, Europe is now full of very successful national and regional Telmore copies.

From 2003 to 2005 I travelled around the world holding workshops for operators at CxO-level about how they could optimise their earnings by using an aggressive MVNO strategy. I also told operators that anyone who did not understand this paradigm shift would - just like Orange Denmark - sustain heavy losses to their business.

One of the first operators I met with was KPN. I will never forget the first workshop I held for Stan Miller and how we spoke about how an operator ought to follow the South Korean example and move from a single brand strategy to a multibrand strategy, and furthermore how one could combine this with an aggressive MVNO strategy. When we today analyse countries like Holland, Belgium and Germany, it is very clear that Stan Miller used precisely that strategy to create enormous value for KPN's shareholders. You can read more about this here: http://www.strandconsult.dk/sw2277.asp.

At
Strand Consult we can see that the Telmore that Frank Rasmussen created 10 years ago and that their current CEO Alan Christiansen has further developed during the past 7 years, is today the foundation of a great deal of the MVNO development we have since seen around the world.

Today there are numerous Telmore copies around the world. Those that have a professional management and have understood how to adapt to local markets have been very successful, while those that have not understood how to operate this type of MVNO have experienced tough times.

It is with pride that our employees at Strand Consult, who have been in this business for many years, can recall how we were the first company to describe the consequences of Telmore's new concept and how it would affect the whole mobile industry. We have since spent many thousands of hours writing and publishing reports about this subject and have held countless workshops for market players around the world that needed to know everything about the no-frill MVNOs and how they could adapt their own strategies to meet this new challenge.

We often come across consultants that have very limited experience on the MVNO market, but are using Strand Consult cases to market their services. We are naturally delighted every time customers choose to purchase their mobile knowledge from the people who know the MVNO industry from the inside, rather from consultants who base their services on information they have Googled on the Internet or heard at conferences.

You can learn much more about the MVNO market, what it currently looks like and how it is developing by visiting www.understandingmvno.com, where you can also read more about the many reports that Strand Consult has published. Strand Consult is today the world's largest knowledge centre for MVNO information and has been for a number of years.

Once again we would like to take this opportunity to congratulate Telmore; you have made history by helping create a new dimension in the mobile industry.

  
More information: How to Succeed in the Second-Generation MVNO Market