Mitel MVNO Means Money

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Mitel MVNO Means Money

Mitel has signed an MVNO deal (TMC video) in order to maximize on its PBX business as it relates to the mobile workforce.  It's one thing to have an application that loads on some smartphones and will talk to the PBX. It's a whole other pool of thought to go make a deal with a cellco to resell their network so that your mobility piece of the PBX puzzle can be better integrated.

As expected, here's why I think this will fail:

  • Most MVNO agreements end in flames - ESPN, Disney, Helio, Virgin Mobile. 
  • The cellular pie is flattening, so how much room is there for another carrier.
  • The current price feud between ATT and VZW means shrinking margins.
  • Contracts, cool phones and fulfillment.
Mitel's Mobility play will encourage more minutes of use and more MB's of data -- all of which they have to pay for (like Cbeyond does) as a metered service. This will also eat into margins.

How do you get around the fact that most people are under a contract already for cell service? Or that many folks want their iPhone (or other cool, preferred handset)? How do they handle handset fulfillment? They could hire an MVNE (MVNO enabler) but that cuts into margin.

Finally there is billing. They haven't had to do billing - per minute, per MB billing. Reconcile wholesale billing from an ILEC! Horror let me tell you. And then bill the end user correctly. More margin out the window.

It does give Mitel an advantage over Shore-Tel and the rest of the hardware PBX services. But it's really only for the installed Mitel customers. It will help sell a few more deals, but I don't see it as a money maker.

I do see it as a way to pump up the news before an IPO though.

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