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Global MVNO Forecasts to 2015 - 5th edition

Global MVNO Forecasts to 2015 - 5th edition

Management Report
Published: March 2011
Pages: 39
Research from: Ovum (was Informa Telecoms and Media)
Sector: Mobile

From: GBP 1995.00
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This report looks at a wide range of MVNO strategies and provides a detailed analysis of MVNO markets and operators worldwide from regional and country perspectives, including MVNO subscriber forecasts for 60 countries. It examines what makes a successful MVNO, the role of MVNAs and MVNEs and how their role is evolving, as they now start to move up the value chain.

The MVNO business model has proved hugely successful in developed markets with over half of the subscribers coming from Europe, but emerging markets have remained largely immune to the MVNO hype until now. However, this is changing as Latin America and Africa emerge as potential growth markets.

The report highlights this and other emerging trends in the sector including data- only MVNOs, ethnic MVNOs, and retail. We also provide detailed analysis on the future of MVNOs from a service perspective, as well as discussing how the sector is moving towards consolidation.

For the first time, the report includes detailed forecasts by country and covers 60 of the world's key markets. In addition, it contains several detailed Case Studies covering the key players across different regions including Best Buy's mobile, Lebara Mobile and Friendi Mobile Jordan.

Case studies include:

  • Case study: Best Buy's mobile
  • Case study: Tune Talk
  • Case study: Vertu's unique MVNO business model in Japan
  • Case study: Lebara Mobile
  • Case study: LycaMobile
  • Case study: Friendi Mobile Jordan
  • Case study: Kirene avec Orange

Key questions answered:

Where and when are MVNO growing? Under what conditions MVNO markets proliferate?

What makes a successful Wholesale strategy for MVNOs?

How do operators find their best MVNO partners?

What will growth look like for MVNOs at regional and country levels?

What impact have MVNOs had in their markets and why?

What MVNOs should be aware of when making their plans?

Countries covered by Global MNVO Forecasts 2015 research:

        Argentina Australia Austria
        Belgium Brazil Bulgaria
        Bahrain Bangladesh Cameroon
        Canada Chile Colombia
        Croatia Czech Republic Denmark
        Egypt Estonia Finland
        France Germany Greece
        Hong Kong Hungary India
        Ireland Israel Italy
        Japan Jordan Korea
        Latvia Lithuania Malaysia
        Mexico Netherlands New Zealand
        Norway Oman Pakistan
        Poland Portugal Qatar
        Romania Russia Senegal
        Singapore Slovak Republic Slovenia
        South Africa Vietnam Spain
        Sri Lanka Sweden Switzerland
        Taiwan Thailand Turkey
        UK Ukraine USA

Global MVNO markets will reach 186 million subscribers by 2015
22 March 2011 :: Dario Talmesio

Western Europe and North America, both expected to grow in terms of MVNO subscription numbers, are not expected to see a radical shift in terms of market structure. The global MVNO market will reach 186 million subscriptions by the end of 2015 with North America and Western Europe still accounting for the vast majority. These two regions will remain the largest MVNO markets in terms of the number of subscriptions and players (see figure 1) and will also continue to top the ranks in terms of MVNO penetration.

Fig. 1: Global, number of MVNO launches, by region, 1991-2010

 Global, number of MVNO launches, by region, 1991-2010 pie-chart

There are a myriad of MVNOs in the global mobile markets; Informa has tracked more than 500 MVNO launches over the past decade or so and believes that many more MVNOs will launch in the coming years. The regional distribution of MVNO subscribers reflects the regional distribution of the MVNO players; the vast majority (46%) of MVNO launches were in the Nordic countries and Western Europe generally.

In terms of revenues, generally MVNOs acquire customer with a lower spending profile, but there are some important exceptions; MVNOs that focus on the enterprise market segment and some ethnic MVNOs have a higher ARPU (in some cases much higher) compared with both national ARPU levels and the average ARPU of their host operators.

MVNOs are some of the most dynamic and competitive companies in the mobile telecoms industry. They are dynamic, in the sense that MVNOs have delivered business models and technical innovation at a pace that is faster when compared with the host operators. They are competitive in the sense that they manage to service customers profitably and offer services that mobile network operators would not be able to with their own capabilities.

Nonetheless, MVNOs have gone through various stages of expansion and contraction since their first inception almost two decades ago. According to tracking by Informa, the largest wave of new MVNO launches occurred between the years 2005 and 2007 (see figure 2) but the number of launches is expected to start rising again in 2011-2012.

Fig. 2: Global, number of MVNO launches, by year, 1991-2010

Global, number of MVNO launches, by year, 1991-2010 chart

MVNOs mortality rate is high: Informa's research indicates that approximately 24.5% of MVNOs have either ceased trading or have been acquired following poor market uptake or poor  financial results. Some MVNOs have sold their business to their host operators following an unmanageable escalation of the debt that they owed to them; while some mobile network operators actively acquired the MVNOs that they were hosting in order to eradicate a disruptive competitive player in their market.

MVNO success stories: Key stipulations

MVNO business models can differ substantially. While there are MVNOs offering just a SIM card and basic services to cater for the low end of the market, there are also MVNOs offering luxury handsets to the very high end of the market.

While the vast majority of MVNOs still make their living with basic voice, SMS and data connectivity services, MVNO services are becoming increasingly more sophisticated. There are some examples of extremely innovative business models that make use of social networks, for instance, or provide data-only connectivity for consumer electronic devices and machineto machine (M2M) services, or include several elements of cloud-based services, or even augmented reality applications.

Some MVNOS are generalist,  offering a product to the masses while others have a good segmentation that helps them to identify and service very well-defined niches of the population.

From a technical point of view, MVNOs are also very different. There are some MVNOs, arguably the minority of them, that have a full technology deployment with their own HLR (home location register), billing system and IN platform. These are often the largest MVNOs, but there are also many that just offer branding and retailing capabilities and rely entirely on their host operators for everything else.

Even from an ownership point of view, several options have been adopted some MVNOs are start-up companies, some are the telecoms extension of a much larger organization and some are 50:50 joint ventures with a mobile operator. Some MVNOs are fully-owned by a mobile network operator but are independent from the operator's retail arm; they interface with the operator's wholesale business just as any other independent MVNO would.

The various MVNOs are different in many respects commercial setting, background, technical capabilities and market positioning but most of the successful ones have one thing in common, they build their mobile business upon a solid set of assets or the capabilities of an existing business.

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