With the number of Mobile Virtual Network Operators (MVNOs) growing rapidly
in developed markets, MVNOs are already having a significant impact on
customer numbers, churn and ARPU in a number of markets. MVNOs are
organisations that offer distinct end-to-end mobile services using the
network capabilities of an existing mobile operator, but do not own a radio
network or spectrum license.
“With over 100 MVNOs launched in Western Europe and over 25 present or due
for launch in the USA, mobile operators cannot ignore the impact MVNOs are
having”, says Dr Mark Heath, co-author of the report, “MVNOs have acquired
nearly a quarter of all mobile users in Denmark. In the UK, Virgin Mobile
has propelled T-Mobile from last to first place in terms of market share by
customer numbers, while in the USA, Sprint PCS hosts more than 15 MVNOs.”
The report shows that the service capability, capacity and cost limitations
of 2/2.5G networks have constrained the competitive focus of today’s MVNOs
within price competition and limited non-voice offerings. 3G is now poised
to fuel the number and diversity of MVNOs, allowing a range of
organisations to deliver content and services from their core businesses,
including multimedia data services and downloads. “A new wave of MVNOs are
already leading the way”, says Alastair Brydon, report co-author,
“Universal Music, TV channel M6 and radio station NRJ all plan to set up
MVNOs in France. Sports content provider ESPN, owned by Disney, plans an
MVNO in the USA while a number of data-only MVNOs have emerged with
services for mobile devices.”
The report shows that all mobile operators have something to gain from
hosting 3G MVNOs. “Although only a relatively small number of mobile
operators have taken MVNOs to date – as some perceive MVNOs in their
discount form to be a major threat – the service capabilities of 3G
strengthen the case for mobile operators to embrace MVNOs”, says Brydon.
The report shows that the growth in 3G MVNOs may cause changes in host
operator allegiances, as mobile operators vie for the right MVNO partners.
“Hosting MVNOs could be the only viable strategy for 3G new entrants to
achieve profitability quickly and avoid unsustainable levels of subscriber
acquisition costs”, comments Brydon, “in addition, mobile operators may
find themselves battling not just for the loyalty of their own customers,
but for MVNOs that have millions of customers.”
The Future of MVNOs in the 3G era reviews the lessons learned from MVNO
activity in Western Europe and North America to date, with case studies in
Denmark, France, the UK and the USA. It considers how the arrival of 3G
will change the MVNO environment in these markets, giving examples of
emerging 3G MVNOs. The report assess the strategic options for different
types of mobile operators (including 3G new entrants) to take advantage of
MVNOs in the 3G era and indicates promising routes to market for
prospective 3G MVNO entrants. The report provides a set of actions for
established mobile operators, 3G new entrants, existing and prospective
MVNOs and industry regulators.
About Analysys (www.analysys.com)
Analysys provides strategy and management consultancy, information services
and start-up support throughout the telecommunications, IT and media
sector. Its grasp of market dynamics, coupled with creativity, rigour and
renowned objectivity, enables Analysys to consistently exceed the high
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