Mobile simplicity for Swisscom and Migros
Swisscom
Mobile simplicity for Swisscom and Migros
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"In the early days, the system withstood an unexpectedly high demand. That gave us a really good feeling that we had made the right choice of partner." Bernard Rothen, Swisscom's head of provider service technique |
For Switzerland’s top supermarket chain Migros and its top telecoms operator Swisscom, jointly running the M-Budget no-frills mobile service couldn’t be simpler. That’s thanks to a full managed services contract with Logica, which runs and operates the service autonomously, allowing the two partners to generate extra revenue without diverting skills and expertise away from their core businesses.
The partnership is simplicity itself. Migros has the brand and the sales network. Swisscom provides the network and employees to manage the contract. And Logica does the rest, from customer account and data management to application maintenance and support.
But what’s most impressive about this story is how short it is. The service was designed and set up from scratch in a matter of weeks – a phenomenal achievement that Logica is set to repeat for mobile virtual network operator (MVNO) partners around the world.
Key benefits:
- Service designed, developed and running in just 11 weeks
- Hundreds of thousands of subscribers added in a year
- Regular, high margin revenue source for Migros
- Access to a new no-frills market for Swisscom
- A model for future MVNO partnerships
- Fully hosted service so no big investments necessary.
The business challenge
Swiss cooperative Migros is a national institution – not only the country’s biggest supermarket chain but a leader in electronics, adult education, golf courses and more. It’s especially liked for its multipurpose value brand, M-Budget, through which it sells low-cost but reasonable quality goods of all kinds and even organises trendy music parties for young people.
So well known is the M-Budget brand as a hallmark of quality and economy that it’s hard to think of a better candidate for the MVNO model. Under MVNOs, retailers use their sales networks to sell
branded mobile phone services. Behind the branding, however, the services are supplied by a third party, in this case Swisscom, the nation’s number-one telephone company.
Together, Migros and Swisscom devised a plan to sell no-frills, pay-as-you-go mobiles through Migros’ low-cost M-Budget brand. The arrangement made perfect sense – Migros would gain a new continuous revenue source, while Swisscom would be able to go after a second market, in addition to the higher spending customers it serves under its own name.
The solution
In the mobile world, skills and knowledge are the factor that often limits growth. Swisscom’s workforce was already busy running its core services and simply did not have the capacity to design, set up and maintain a new brand and product offering, fully beside and independent of its current offerings. It needed a partner that could do the job for it, and with rivals rushing similar offerings to market, it needed someone who could do the job in an incredibly short time.
Logica was the natural choice. A global telecoms and IT leader, Logica has been
supporting Swisscom’s IT needs for over a decade. Swisscom’s plan was to manage maintenance and support internally, but they realised Logica also had the capabilities to take on this aspect of the work and was ready to provide a fully managed service. From a standing start it was able to design and install all the necessary systems, including putting in place hardware, software and personnel hosted at a secure data centre in the Netherlands.
The outcome
In just 11 weeks, the M-Budget mobile service was ready and running – that’s half the time most
suppliers would consider possible. And because Logica helped Migros and Swisscom pip their competitors to market, the service met huge demand on its launch in September 2005, with over 300,000 shoppers signing up.
Yet despite so many subscribers, running the M-Budget service nowadays scarcely makes Swisscom sweat. That’s because Logica does everything from provisioning to billing, all by itself, including online bill presentation so customers have more convenient access to their information. Swisscom just provides two employees to supervise the contract and operations. Meanwhile, all Migros has to do is turn its finely tuned distribution and selling network to a new product. For their trouble, they get a regular, hands-off, high-margin source of income that doesn’t take up much space in stores.
So how does the future look for this three-way partnership? The focus is on maintaining exceptionally high services standards to retain and attract customers, as well as to introduce new features (judiciously, since the target market is concerned above all with simplicity). As the service continues to draw in subscribers, all three commercial partners benefit – establishing Swisscom Migros as an ideal model for MVNOs worldwide.