PGID :81920030

Individual Assignment submission form

ISB PGPMAX: 2019

Individual Case - Circles.Life

Course Name: Business Model Innovation

Faculty: Prof. Srivastava, Rajendra

Submitted by: Sri Rama Murthy Battula

PG ID: 81920030
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How are Circles.Life's business model different from the traditional

telecommunications model? How does it differ from typical MNVOs?

Circles.Life is not a traditional telco line like M1, Starhub, Singtel, but a VoIP. Unlike,
traditional telcos its business model is asset-light. Adopting digital technology-based business
model innovation with a focus on improving unit economics has moved Circles.Life to a
different league. Circles.Life bought airtime in wholesale from M1 instead of building its
physical mobile networks. Therefore, less maintenance and a burden on physical assets and
debts. It is the only mobile virtual network operator with fewer assets such as physical
infrastructure and stores. The telco market in Singapore is very saturated, and all the telcos
differentiate themselves from the others in terms of service. Circles.Life started their business
in differentiation strategy to make themselves known among the consumer as all the other
three telcos had their bad records. Circles.Life knows what consumers want, and the first
targeted group is heavy users for the next couple of years. Much appreciated is the no hidden
charges and customization of services which are most attractive. Circles.Life has much
competitive advantage to start within this industry, and it began in a slim structure. Most
telcos will bind the customer to a year or two contracts to have a more attractive discount and
better deal in data. However, many customers

had problems during the contract with their services, which are not attended to, and
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Singaporeans now has less favour towards an agreement with the telcos. With no contract
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obligation, Circles.Life is advantageous to ask consumers who are about to terminate their
contract to give them a try. There was no hidden charge for customers; the other three big
telcos all had a history of overcharging customers—the promise of no hidden cost in
Circles.Life creates an understanding of the needs of the consumer. Circles.Life is a
competitive advantage as no other telcos promise not to have hidden charges. The whole
process of purchasing and customization is efficient and more suitable for the technology-pro
generation. No more queuing and no more physical store is one of the competitive advantages
of Circles.Life. Although all the other three telcos also have online shops, people tend to
forget that they have these services because they can see the physical stores everywhere.
Circles.Life without having a physical store saves their cost of operation and makes
purchasing and dealing with customers easier virtually through the Internet. It is more
convenient for their target market group, which is the more technology-savvy people. The
products and offerings offered by Circles.Life is a response to the grudge of Singaporean
towards the telecom industry all these years. Circles.Life service differentiation a bundled
services with better cost structure, product offerings, network distribution and customer
support with no contractual obligation. These innovations are often based on improvements
in back-end infrastructure that differentiate the disruptor from competitors.
Unlike other MVNO's Circles.Life has the two-pronged strategy of
1.Value proposition must go the customers beyond the price they pay.
2. Cloud-based automation of customer processes having control of technology instead of
outsourcing.
Circles.Life invested in technology with a focus on value creation and value appropriation in
the later stage. It sought to bootstrap entrepreneurial growth through competitive pricing and
enhanced customer experience. Typical MVNO's buy and re-sell model is vulnerable to 'price
wars' and over the capture of value by the physical infrastructure partners. Circles.Life
services have the edge over other MVNO's in various ways Circles.Life developed a new
technology stack with features in the e-commerce, network intelligence and system
operations layers. Repositioned existing business models and launch new digital services, to
move beyond connectivity to a new world of cross-industry competition and collaboration.
These eliminated physical retail outlets, cut customer acquisition and service costs through
automation, and allowed Circles.Life to introduce non-telco services such as event ticketing,
insurance, games and shops on the platform. Digital tools and capabilities create more
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reliable, secure and autonomous networks with increased flexibility to meet diverse and
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dynamic customer requirements.

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What Value Added Services Should Circles offer (Could Offer) to

customers?

Circles.Life understood that digital native consumers were less inclined to price and bothered
about inconvenience, transparency, and control. By Freeing customers from these pain points,
the company was able to differentiate its value proposition. Building an end-to-end digitized
platform, Circles.Life optimized for flexibility and customization. Circles.Life handles the
entire value chain – logistics, billing, and a rapid digital onboarding process.

The current product offering of Circles.Life are

1.Telecommunications: Data + Calling

2. Financial Services

3. Discover: Events + Movies

4. Devices + Roaming

5. Gaming

Apart from knowing the pulse of didital native customers, the following value-added services
were introduced to make them sticky customers.

 Content and applications: The focus here is on exclusive offerings,such as

music, videos, games, or certain sports content bundled with mobile plans or
devices.
 Convergent services: Circles.Life offer all-in-one services encompassing
service lines such as fixed Internet or pay-TV, along with mobile service.
 Retail presence:  Circles.Life focuses on customers who are already part of a
retail network, so marketing efforts mainly consist of in-store activities.
 Service differentiation: Circles.Life integrates telecom products and services
with loyalty programs, financial services, or other services related to a
company's or group's assets and resources.
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Is it vulnerable to future competition and imitation? How can it protect

any advantage it may have?

Vulnerability of Circles.Life is on the following fronts

a. Competitor has SIM only plan able to offer services cheaper.

b. Singapore telco market being saturated might further reduce ARPU.

c. Strong, established telcos were launching identical products to target Circles' 'niche.'

d. Have a high churn rate for customers belonging to other segments (except 'digital
natives)

e. With the increase in functionality, a proportional increase in relevant competition is

expected.

f. Uncertainty about scalability in the rest of Asia

The value structure and strategy based on that will protect Circle. Life to succumb to
competition and imitation.

1.Never running out of data

2. Easy to join

3.No contracts ever again

4.Being in control

A growth mindset, long-term strategy of in-house technology coupled with a long-term

relationship with M1 will have long resilience to any competition and imitation.
Circles.Life has avoided outsourcing any technology-related integration and thus have a
significant advantage over the competition in this field. They control cloud-based
automation of customer processes, enabling them to reduce internal efforts expended on
internal processes. With a strategic partnership with M1, the lack of infrastructure will not
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be a problem as long as Circles.Life maintains a good relationship with M1.

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What role will new technological development have in the viability of

Circles.Life?

Circles.Life is at the mercy of mobile network operators(M1) when it comes to 5G because

network operators control infrastructure rollouts. In the past also, Network operators used to keep
new technologies to themselves because they wanted to earn a return on their heavy capital
investments before offering wholesale access to MVNOs. Growth potential for Circles.Life is
more in B2B 5G rather than B2C 5G. Instead of simply offering MNO-based connectivity,
Circles.Life will benefit by focusing and specializing in business-to-business 5G use cases to
differentiate themselves from the crowd. 

Network operating companies like M1 should emphasize maintaining networks and extending
connectivity. Circles.Life should become "service-oriented companies" that aim at specific
services by 5G, such as electric vehicles, finance and banking, healthcare and others—the
viability of Circles.Life lies in taking the role of specialized service companies and starting a

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marketplace for services.

The crux is that 5G and ongoing trends offer many opportunities, but MVNOs must be willing to
transform to grab these opportunities. Circles.Life needs to be faster and digital native before the
big players want a space for themselves in the market.

Embedded SIM can be a latent revenue-generating and customer-retention tool for Circles.Life. It
has products in consumer connectivity and more prominently in B2B internet of things solutions
such as wearables and remote devices.

The advent of Artificial Intelligence and 5G together shows excellent promises for
fintech's to increase the active user base exponentially. Given the 5G data speed, banks can
leverage faster networks to detect fraudulent transactions and help systems and merchants
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and consumers from losses. The pandemic has forced people to stay at home and has
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facilitated work from home for elders and gaming as house entertainment. Because of this,
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the gaming industry is demanding more home entertainment. 5G's low latency makes
gameplay more interactive. Cloud gaming requires three times more volume of data
consumption which is provided by 5G, thus providing greater control of the quality of
service. 5G also opens new possibilities on the Internet of Things, electric and self-driving
cars. Therefore, the 5G technology is a perfect fit for the offerings provided by Circles.Life

Reference

1.https://publishing.insead.edu/case/circleslife-business-model-innovation-and-digital-
entrepreneurship-telecommunications

2. ACCELERATING DIGITAL TRANSFORMATION - An in-house startup can be

crucial to change.
By Saahil Malik, Karthik Ramakrishnan, and Meghna Basu

3. To be or not to be the future, of Telco Business model -2030 Delolitte monitor

4. Technology and Innovation report 2021 -UNCTAD
5. Circles.Life: Value proposition teardown by @ Mobilise
6. Challenges, Opportunities for MVNOs in 5G Era

 AuthorJulber Osio
 ThemeTechnology, Media & Telecom
 SegmentCorporations

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