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What is Telecom-as-a-Service?

James Bessenbach

Apr 24, 2024

5 min

Despite being one of the largest industries in the world, mobile telecommunications has lain dormant in terms of digital innovation and accessibility over the past decade. 

But there is a new kid on the block that is about to shake this industry awake: Telecom-as-a-Service

In a nutshell, Telecom-as-a-Service (or TaaS for short) empowers any business to enhance their core offering with branded mobile plans, seamlessly embedded into their device, app or website, without needing to integrate directly with a carrier. 

Let’s unravel what this means in practice, and why it’s transforming mobile connectivity for good.  

Passing the baton 

A new breed of wireless providers has been taking the US market by storm as of late. They have amassed millions of customers in an unprecedented short time span, and are outshining incumbents in affordability, customer satisfaction and ease of use. 

They include lifestyle brands like Ryan Reynolds’ Mint Mobile, cable-mobile bundles like Xfinity Mobile and Spectrum Mobile, and Big Tech offshoots like Google Fi.  

What do they all have in common? 

Firstly, none of them own or operate their own physical mobile network. Instead, they lease wireless capacity from major carriers like AT&T, T-Mobile or Verizon, which they repackage in their own branding. They are known by the somewhat clunky industry term “Mobile Virtual Network Operators” (MVNOs). 

Secondly, in contrast to the big, catch-all carriers that try to appeal to the masses with generic offers, they hone in on niche target audiences with specific needs. These audiences can be characterized by demographic factors, user behavior, price sensitivity or brand affinity, to name a few. 

For instance, budget-conscious teens that make one analog phone call per year but consume 50GB worth of social media content a month need an entirely different phone plan than their parents. Similarly, members of the Latin American community may expect customer support in Spanish and free international calls to stay in touch with loved ones abroad. 

Narrower still, brands like Google Fi are addressing their highly engaged users by bundling mobile plans with discounts on their Google Pixel smartphone and free access to Youtube Premium.  

As these examples demonstrate, you can achieve astronomical success in the mobile business with the right targeting, and you don’t need to operate your own network to do so.

This is just the beginning

It does not take much imagination to see the potential of this dynamic. For brands with digital distribution channels and loyal customers, embedded connectivity presents a compelling opportunity to monetize their captive audience and strengthen stickiness without spending a single marketing dollar.   

To stand out in the constant competition for eyeballs, a streaming service could offer a branded mobile plan that doesn’t use up any data when users watch their favorite show on the go. This way, the streaming platform can present attractive bundled deals and foster stronger relationships with audiences, ultimately giving them a leg up on the competition. 

Or imagine you could add a travel SIM with one tap when booking your vacation rental to ensure you stay connected on your next trip. By offering complimentary services at checkout, booking platforms can capture a larger chunk of their users’ travel budget while creating a more convenient travel experience for their users. 

You get the picture - by embedding connectivity into your product, you can create tailored mobile experiences that enable you to tap into a lucrative recurring revenue stream and gain a competitive advantage. 

So, how do I launch my own wireless service?

There is a catch. The technical, regulatory and financial burdens of running a wireless service make it prohibitively expensive and complex for most businesses to tap into the connectivity market. Companies looking to launch their own MVNO face multiple hurdles:

  1. Network access: To access wholesale connectivity, you first need to invest 6-9 months into sourcing and negotiating contracts with telecom carriers, with no guarantee of competitive commercials and little room to customize plan design.  

  2. Upfront commitments: In order to even be considered by the big carriers, these contracts demand millions of dollars in volume commitments paid upfront, introducing a significant risk factor.

  3. Integrating with the carrier's network: As there are no industry standards for API design and documentation, you need to devote another 6 months just to integrate with the carrier’s legacy systems. 

  4. Hiring entire teams to build the software stack from scratch: In addition to the integration effort, you still need to build and piece together systems for checkout & billing, SIM provisioning, subscription management, user analytics, and customer support in order to go to market.  

  5. Regulatory compliance: Even if you manage to jump all of these hurdles, you also have to acquire a carrier of record registration to offer phone plans, not to mention navigating the hundreds of thousands of different potential filing requirements resulting from federal, state, and local telecom taxes.

Enter: Telecom-as-a-Service

Telecom-as-a-Service platforms take on all of these burdens on behalf of the MVNO,   enabling businesses of any size to set up their own branded mobile service through one simple API integration. Akin to how Stripe empowers any business to accept payments with just a few lines of code, TaaS slashes the time to launch an MVNO from 12-15 months down to a few days and evaporates the associated upfront costs. 

This empowers non-carrier businesses to enter the mobile market swiftly and cost-effectively, without derailing focus away from their core business, unleashing endless possibilities to create novel mobile experiences.  

How does Telecom as a Service work?
  • Instant access across the globe: By bundling multiple networks in a single, modern API, TaaS platforms provide businesses with a seamless integration that gives them a flexible choice of networks across multiple geographies, making international expansion effortless. 

  • Purchasing power: By buying large volumes of data, voice and text in bulk, TaaS platforms can negotiate better wholesale conditions with carriers than one individual MVNO could ever achieve.

  • One-stop shop: With all telecom features and regulatory licenses baked in, TaaS platforms take away the operational effort of running a mobile plan. That includes SIM provisioning, subscription management, billing & taxes, customer support and usage analytics.

  • Economies of scale: By spreading the operational overhead of running the wireless network across multiple business customers, TaaS platforms minimize the startup and maintenance costs. 

This way, each contributor to the wireless value chain focuses on what they do best: the carriers operate and maintain the network infrastructure, the TaaS platform enables seamless and instant network access, and the MVNO owns the distribution and end-user interaction, tailored to their users’ specific needs.

Who stands to gain in the end? 

The outcome is a win-win-win:

  1. Consumers enjoy greater convenience and flexibility in their mobile services. Whether it's personalized plans tailored to their usage patterns or exclusive perks tied to their favorite brands, Embedded Connectivity promises a more interconnected and customer-centric future.

  2. By turning their customers into subscribers, brands in turn foster deeper relationships with their users and tap into a lucrative recurring revenue stream. On top, they gain rich new insights into users’ behavior, unlocking new opportunities to add value. 

  3. Finally, carriers gain access to previously out-of-reach customer segments without needing to invest in capital intensive customer acquisition, customer support or technical integration.

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