French MVNO Simplus has gone from a five-tier range of plans to a three-tier structure. The company is retaining its €2 plan offering 1 hour of calls and 60 SMS. It has halved the price of its plan that offers unlimited calls and SMS to €10 a month, though it now includes no data. The top-tier plan costs €20 a month for unlimited calls, SMS and 500 MB of 3G data, which is throttled down for the next 500 MB, and then capped until the following month.
We think streamlining its suite of plan offerings is a good move by Simplus. Most MVNOs don’t have the wherewithal to compete with MNOs on a wide array of plans, so maintaining a laser-point focus of resources and capabilities is the way to go. By targeting appropriate niches and then concentrating on providing them with the highest quality service, an MVNO can succeed in spite of its limitations.
For MNOs, on the other hand, the lesson here is to continue to offer a wide variety of plans, precisely as a means by which to keep MVNOs in their place as second tier competitors. Having a large and diverse portfolio of offers will help to ensure that core customers have no reason to consider switching to an MVNO. Therefore, for any MNOs contemplating a reduction in the number of plans offered, we counsel them to rethink that approach, because their goal should be to offer everything to everybody – for therein lies their distinctiveness (and competitive advantage) in the market.