The Future of MVNOs - Informa Telecoms & Media

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offering voice and basic SMS-enabled financial servicesfor low-end and feature phones, but as smartphoneprices decline, more sophisticated services will appear.The financial MVNO, however, faces the samechallenges as the retailer MVNO in terms of negotiationswith MNOs, given its natural focus on the mass market.In addition, operators are increasingly eager to playa role in the m-commerce and m-banking markets.The way regulation develops in this area will largelydetermine the development of this MVNO model.Regardless of market-structure barriers to MVNOs, giventhe current demographic trends, Informa believes thatthose MVNOs targeting the youth segment have a largeraddressable market in Latin America than in Europe andNorth America (see fig. 7). Nonetheless, the size of theaddressable market for youth MVNOs will depend on theincome levels and local competitive dynamics in eachcountry. In the case of Virgin Mobile Latin America, forexample, the flexibility of pricing models will determine thereal size of the youth segment addressable in countriesas different as Chile and Bolivia, especially when MVNOsplan to offer unsubsidized devices. The strength of theopportunity for the youth MVNO will also vary depending onother factors, such as changing regulation. For example,with Brazil planning to cut taxes for tablets manufactured inthe country, there might be an opportunity for data-focusedMVNOs targeting the devices to the youth segment.Fig. 7: Global, estimates of under-15 populationpercentage, end-2010Under-15 population (%)35302520151050Source: UNCaribbeanCentral AmericaSouth AmericaNorth AmericaEastern EuropeNorthern EuropeSouthern EuropeEastern EuropeThe MVNO quadrant: Global and regional case studiesThe viability of MVNOs depends on local market conditions – and on the will and ability of operators to reach out to nichesof customers with highly relevant services. Informa presents a selection of mini case studies of international and regionalcompanies that have succeeded with the MVNO model.The incumbent MNOOrange, FranceOrange, part of the France Telecom Group, supportsseveral MVNOs in France, its home market, including:• Virgin Mobile, which recently incorporated twoquad-play offerings and is regarded as oneof the most thriving full MVNOs globally. Itssubscriptions totaled more than 2 million atthe end of 2011.• The M6 MVNO of Metropole Television,the third most-watched TV network in thecountry.• NRJ Mobile, a 90/10 joint venture betweenbanking corporation Credit Mutuel-CIC andmultimedia group NRJ. Like Virgin Mobile,NRJ targets the youth segment. It had 900,000subscribers at the end of 2011.ICE, Costa RicaBefore the mobile market was liberalized in late 2011,state-owned ICE launched two MVNOs to preemptmoves by new competitors Claro and Movistar. ICEpartners with well-established Costa Rican companiesto reinforce its role and image as a key asset for thecountry. ICE’s network currently supports two MVNOs,both with 45,000 subscribers as of April 2011:• Fullmovil is owned by Grupo Virtualis, aconsortium formed by consumer electronics,household appliance and furniture retailersGrupo Monge and Casa Blanca.• Tuyo Movil is owned by national TV stationTeletica. The first MVNO to launch in CostaRica, it has achieved positive results in bothquality and customer experience.8© 2012 Informa UK Ltd. All rights reserved. www.informatandm.com
The challenger MNOE-Plus, GermanyGerman operator E-Plus has been owned by Dutchtelecommunications operator KPN since 2002. E-Plus’network enables a range of affiliated MVNOs, includingpan-European MVNO Simyo, which is also presentin Belgium, France, the Netherlands and Spain, andsupermarket retail MVNO Aldi Talk, both leading theno-frills prepaid German market. E-Plus also enablesethnic MVNO Ay Yildiz, targeted at the large Turkishexpat community, as well as blau.de, MedionMobile,MyMTVMobile and Base. Its advanced and diversifiedMVNO strategy has been instrumental in allowingE-Plus to maintain its market share at just under 20%,making it the third-largest operator in Germany.Movistar, MexicoTelefonica in Mexico was one of the Latin Americanpioneers in the MVNO space, hosting one of the firstregional MVNOs, by fixed-line operator Maxcom, backin 2008. In recent quarters, Telefonica has consolidatedits MVNO strategy. In July 2011, Megacable launchedMegacel on Movistar’s network with the plan of targetingexisting fixed-line clients by offering multiple SIMs tofamily households at preferential rates. At the end of2011, Movistar was announced as the MNO partner forVirgin Mobile in Mexico. As a challenger operator in amarket where America Movil has a dominant presence,MVNO enablement has become an important strategictool for Movistar in an effort to gain market share.The MVNOPoste Mobile, ItalyPoste Mobile, the MVNO of national postal servicePoste Italiane, is the most significant player in theItalian MVNO market, with various voice and dataoffers, mobile phone deals and a large distributionnetwork. It offers a host of VAS, primarily m-bankingand m-payment, such as airtime remittances, couponclick-to-buy and m-insurance. Poste Mobile recentlylaunched the Zero Pensieri Infinito service plan, whichincludes unlimited voice calls and SMS messages to allnational destinations plus 1GB of data for a monthly feeof €34 (US$44). Poste Mobile is also a rare example ofan MVNO marketing services specifically to businesscustomers. Hosted on the network of second-placedVodafone, it has more than 2 million subscriptions.Uff, ColombiaUff was launched in late 2010 by TV network RCNTelevision, a unit of media conglomerate Ardila Lullegroup. Uff has a no-frills business model based onoffering cheap long-distance calls to the main countrieswhere the Colombian diaspora lives. Hosted on Tigo’snetwork, Uff rapidly added 50,000 subscriptionsin its first two months, reaching a total of 250,000subscriptions by the end of 2011 and becoming thefirst sizable MVNO in Latin America. From launch, theMVNO has evolved its service proposition by adding twoprepaid data plans and two BlackBerry plans. Througha strategic agreement with Nokia, it also offers the“Pack Listo Uff” plan, including a Nokia C3 device withunlimited data.The MVNETeleena, Netherlands/UKTeleena is a mobile virtual network enabler (MVNE)based in the Netherlands and the UK that provides anarray of services on a wholesale basis to MVNOs andcorporate customers, including low-cost roaming andconverged fixed/mobile applications. The companyis focused on enabling MVNOs to differentiatethemselves through offering VAS. Teleena owns andoperates its own BSS/OSS and an all-IP mobile corenetwork, which is connected to Vodafone’s radioaccess network in the Netherlands. In Europe, Teleenahas a partnership with Vodafone in the UK and theNetherlands, where it hosts over a dozen MVNOs.Datora Telecom, BrazilDatora was the first telecoms company to apply for anMVNO license from telecoms regulator Anatel in Brazil.This license enabled Datora to become the first MVNOaggregator (MVNA) in the country. The company hasinternational expertise in both connecting operatorsusing VoIP and infrastructure management. It is currentlyenabling the country’s second-placed MNO, TIM Brasil,and insurance company Porto Seguro to launch the firstMVNO in Brazil. Datora has also signed an agreementwith Virgin Mobile to launch operations in the country. Thecompany has a strong focus on the machine-to-machine(M2M) opportunity in Latin America.© 2012 Informa UK Ltd. All rights reserved. www.informatandm.com 9
Page 2 and 3: ContentsAbout the authors..........
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