Blyk's journey from MVNO to network service

UPDATE2: It now turns out that the previous story may have been more late than wrong, at least so says NMA and telecoms.com. This is also obliquely supported by Jonathan MacDonald's latest blog on the subject!
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UPDATE: Looks like New Media Age might have got it a bit wrong in their article that kicked all this off! According to Mobile Marketing magazine the original story is a lot of tosh. This is backed by a blog post by Jonathan MacDonald on the subject. Perhaps, following along some of the lines of thought below, it is what they should be doing though?
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Was interested to read this morning that Blyk had taken the second step in what has become their transition from an MVNO to a network service provider. When they announced their last round of investment part of the story was a new "partnering strategy" - one aspect of which was direct partnering with MNOs.

They have now taken the next step down this road and announced that they will no longer operate as a consumer facing MVNO, and will rely entirely on partnership arrangements with operators to get to the consumer.

From an extreme helicopter level view the overall pattern of relationships remains the same. The MNO provides access to the consumers to Blyk who then partners with brands to engage those consumers. The brand pays for this engagement and the consumer is rewarded by call credits etc.

That said there are obviously a large number of practical differences between the two shapes:

• Blyk end up with a massively reduced operational overhead - being a small MVNO is not cheap - as many have found to their cost before.
  
• the users now "belong" to the operator, not to Blyk. This shifts the balance of power, but also makes the partnering concept a more appealing one to the operators since it increases their number of subscribers, and for subscribers in Blyk's current demographic likely increases ARPU.
• Blyk are now much more dependent on the operator for effective communication with the customers - but then conversely the operator is now more of a partner than simply a paid conduit.
• Blyk can now offer their service to any operator who is willing to take it worldwide - much more flexible.
  

Looking at all of this retrospectively (or using "post rationalisation" as Russell put it ;-) using an initial MVNO phase to prove the model works - and with 25% response rates to show to brands and healthy ARPUs to show to operators they have certainly done that - might have always been the plan.

One small fly in the ointment is that now Blyk have spent a large amount of their investors money proving their model works, other players might start muscling in and taking market share from them. It is early days yet but Russell Buckley recently blogged about a Croatian company Out There Media which had launched a comparable service called Tomato Plus with some success.

On one hand you might ask if giving up the MVNO angle has reduced Blyk's differentiation and thus made them more vulnerable to smaller newcomers, but on the other perhaps it was never a sustainable mode of operation but it has given them first mover advantage (which they must now maintain) and an established brand identity. Only time will tell!

PS. Very pleased to have got a mention in the latest Carnival which is up over at VoIP Survivor.