Challenge:
By 2006 Lebara, founded in 2001, had developed a significant call card business in Europe with MVNOs in the Netherlands, Norway, Denmark and Sweden. However, previous attempts to launch an MVNO in the United Kingdom had not been successful. Furthermore, the advent of growing domestic mobile use and increasing negative consumer sentiment about the calling card market and its pricing tactics, meant it was strategically important for Lebara to launch a competitive mobile service in the UK.
For Vodafone, Lebara’s eventual host mobile operator partner, their challenge was to grow market share and to change their traditional perception as an enterprise-focused operator. This entailed driving organic and indirect growth through creating a portfolio of MVNOs that already included Asda Mobile (serving Retail) and BT Mobile (serving Small Medium Enterprises).
Solution:
Piran originated and negotiated the partnership between Lebara Mobile and Vodafone – then the largest mobile operator in the UK. Prior to this we had communicated Lebara’s proposal and specific commercial requirements to the four mobile operators. For Lebara, any A-leg (originating) wholesale pricing for international calls had to allow Lebara to compete on key international destinations such as India, or Pakistan or Sri Lanka where prices were already lower than comparable domestic mobile calls – without which Lebara would not be able to migrate customers from traditional calling cards.
We were successful in obtaining multiple competitive offers, but it was clear that Vodafone’s offer had the best overall strategic fit and would also not cannibalise their existing market segments. As part of the subsequent detailed heads of terms negotiations, we arranged for Vodafone’s wholesale team to visit Lebara’s existing operations in the Netherlands and how their hyper-local ethnic marketing, built around local shopkeepers acting as sales agents coupled with customer support in multiple non-European languages, was a sustainable differentiator.
Once the contract was signed, we supported Lebara in its launch activities. We worked closely with the technical teams to ensure the pre-paid propositions were built and configured correctly in accordance with the detailed business requirements. Separately, we obtained a SIM card distribution agreement so that Lebara’s proposition would be available on the high-street too.
Outcome:
Within 12 months the Lebara agreement became the most successful MVNO partnership for Vodafone UK, exceeding previous partnerships with Asda (WalMart) and British Telecom, and in terms of international mobile traffic carried even exceeded that originated by Vodafone’s own customers.
Both Lebara and Vodafone acknowledge Piran’s significant role in setting solid foundations upon which this partnership has flourished to this day.
