Brazilian Football Clubs Starting MVNOs

Brazilian Football Clubs Starting MVNOs

At least eight Brazilian football clubs, in the A and B series, are offering mobile telephony services under their own name, another six have signed contracts to launch providers by the end of April, and five more are in negotiations, reports Valor Economico. The trend has gained strength since the second half of 2019 with licensing agreements signed by football clubs with the MVNO Dry Company, which has about 350,000 customers.

The first to launch an MVNO was the SPFC football club, followed by Cruzeiro, Bahia, Fluminense, Ceara, Vasco, Sport and Fortaleza. The telecom infrastructure available to fans served by Dry is provided by another MVNO, Surf Telecom, which in turn uses TIM’s mobile network.

Tarifica’s Take

As a business model, the MVNO has been shown to benefit greatly from basing itself on affinity groups. Unlike MNOs, virtual operators are small-scale companies that have two chief selling points—low price and tight focus. Typically, MVNO offerings are targeted at fairly narrowly defined demographics, the widest of which is youths, because this age group generally has need of budget-minded plans and packages. Narrower groups that have been the target demographics of MVNOs include customers of department stores, ethnic groups, guest workers, and even religious groups.

The idea is that affinity between people, in whatever form, is a defining characteristic with built-in loyalties that can be exploited by a mobile offering. Not only does the MVNO get a raison d’être and a pre-existing customer base to start with, but the customers have an already-established sense of community that makes them want to be in touch with each other via the mobile service. Offerings of lower rates or free minutes within the network are particularly persuasive when the customers are affiliated with each other.

The prevalence of youth-oriented MVNO offerings is evidence of the inherently social, affinity-based nature of MVNOs. Many youth brands have tried to cultivate this quality by positioning the MVNO almost as an example of social media, with promotions and activities tied to that. Sports teams are another kind of affinity group—a particularly strong one, in general. The passionate allegiances that fans have for their teams makes it natural to extend a team’s brand into a mobile service brand. Not only will the brand name itself be a strong attraction for new customers to subscribe to the MVNO, but the very ways in which fans now participate in the sport are intimately tied up with mobile usage. An example is “second-screening,” in which fans use their devices to go online, get game-related information and interact with other fans while the game is in progress. In general, fans of the same team will have an above-average likelihood to want to communicate with each other about the game, and being fellow subscribers of a team’s MVNO would facilitate that.

The explosion of football-based MVNOs in Brazil attests to the appeal of this model, particularly in a country as football-obsessed as Brazil. The ecosystem of nesting MVNOs and enabling entities connected to TIM Brasil is rising to the occasion and producing a large crop of team MVNOs, and it only remains to be seen whether the passions of the fans will be directed toward mobile subscription sufficiently to sustain all these offerings.