Examining the operator-operator franchise model

February 2010 | 18 pages | ID: EC4CED3CF7AEN
Ovum

Abstracts

Operator-operator franchises in the mobile telecoms industry are not new. Leading players have licensed their brand or branded products to other market players for more than ten years. Vodafone remains, by far, the chief advocate and promoter of the franchise model. However, while the model has its merits, other mobile operator groups have refrained from embarking on widespread operator-operator franchising activity. In this report, we examine the benefits and challenges of the franchise model and evaluate the value it brings.

Contents

Executive summary
In a nutshell
Ovum view
Franchise models in the mobile industry
Franchises: an overview
Comparison of M&A versus franchise
Different types of franchise in the mobile industry
Operators and their franchise partners
Strategic drivers and challenges of franchises
Strategic drivers
Franchisor
Franchisee
Risks and challenges
Franchisor
Franchisee
Justification for franchises
The broad rationale
The reputation factor
The ‘acquired expertise’ factor
The scale factor
Scorecard for the franchise model
Impact on sustainable competitive advantage
Impact on competitive flexibility
The allure of cheaper roaming
Suitability for single-market operators
The future of franchises
Is it still relevant?
Vodafone case study
Overview
Benefits of the partnership
Risks

List Of Tables

LIST OF TABLES

Table 1: and their franchise footprint (1 January 2010)

List Of Figures

LIST OF FIGURES

Figure 1: The M&A – franchise spectrum
Figure 2: Franchise models in the mobile telecoms industry
Figure 3: Justifying franchise deals
Figure 4: Subscriber market share in Singapore (2000 – 2Q09)
Figure 5: Subscriber market share in Hong Kong (2000 – 2Q09)