The Future of MVNOs - Prepaid MVNO

Understanding the
global picture
A new phase of MVNO expansion is beginning
MVNO markets have gone through various stages
of development in recent years. Since the first
introduction of MVNOs in the 1990s and the second
wave of proliferation in the mid-2000s, the number of
players has increased and contracted in cycles. The
attitude of mobile operators has gone through some
radical changes: Initially, the mobile operators fought
against MVNO legislation and the MVNOs themselves;
then they accepted the existence of MVNO players; and
then they started eagerly seeking new MVNO partners
and developing aggressive wholesale strategies.
Informa believes that a rejuvenated phase of expansion
is beginning. In markets where MVNOs have traditionally
played a role, typically Europe, Asia Pacific and
North America, MVNO players are consolidating and
internationalizing but, despite this, they are continuing
to grow in many segments.
There are still many market segments untapped by the
mobile network operators that are being addressed by
MVNOs – these include the ethnic markets, data-only
connectivity, and community-led and retailer-owned
MVNOs – and there is also a strong push from mobile
operators wanting to increase their share of mobile
wholesale revenues. Informa believes that virtually every
mobile market has the potential to benefit from MVNOs,
and every mobile operator can derive an advantage from
MVNOs.
The global MVNO market will reach 186 million
subscriptions by the end of 2015. Although North
Fig. 1: Global, number of MVNO launches, by region,
1991-2010
Western Europe
46%
Source: Informa Telecoms & Media
Asia Pacific
12%
Eastern Europe
14%
Africa
2%
Middle East
2%
North America
21%
Latin America
3%
America and Western Europe will still account for the
vast majority (see fig. 1), new markets are developing
– Latin America, Africa, Middle East and Asia are all
experiencing great MVNO interest.
When their offering is appropriately designed, MVNOs
can be a win-win-win market: host operators can reach
additional – actual or potential – customers in a way that is
more efficient compared with what their own retail networks
can do; wholesale partners can enrich their existing
nontelecoms services with mobile connectivity, or extend
their brands into the telecoms sector; and customers can
benefit from a more accurately-segmented offering.
However, the reality is that, in the vast majority of mobile
markets, MVNOs do not exist at all, while in some markets,
MVNO activity is still in an embryonic phase. In developed
MVNO markets, the MVNOs can account for approximately
15-20% of the customer base, a level that is generally
considered physiologically sustainable.
The outlook for MVNOs
in Latin America
The market is still embryonic, but there is
significant potential for growth
Typically, Latin American MVNOs have been the domain of
existing telecoms companies keen to offer converged fixed/
mobile bundles. The most notable examples include the
ISP Maxcom and the cable player Megacable in Mexico,
ISPs UNE and ETB in Colombia, and Telsur/GTD in Chile.
The first nontelecoms MVNOs appeared only in the
second half of 2010. Initially, Colombian TV group
RCN launched Uff, an MVNO offering cheap longdistance
calls to fixed and mobile numbers in the main
countries where the Colombian expats live. Then, in
mid-2011, the region saw the first retailer launch,
when Costa Rican electronics and furniture retailers
Grupo Monge and Casa Blanca introduced Fullmovil.
The mobile network operators (MNOs) have finally started
to look with interest at the wholesale model – and the
initial figures are encouraging. For example, Uff in
Colombia is already a sizable MVNO, with close to 250,000
subscribers at the end of 2011 (see fig. 2).
In Brazil, where formal MVNO regulation was passed
in September 2010, the regulator Anatel granted MVNO
4
© 2012 Informa UK Ltd. All rights reserved. www.informatandm.com