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United States Mobile Virtual Network Operator (MVNO) Markets
Frost & Sullivan, May 2005
MVNO-MNO Alliances Enhance Revenue Growth in U.S. Wireless Market
As wireless services expand their stronghold in the United States, service providers are diversifying into wireless data and other differentiator services. This will not only avoid possible stagnation but also drive top-line and bottom-line financial results in the near future. Strategic alliances with Mobile virtual network operators (MVNO) are expected to help service providers combat the looming threat of saturation. Besides offering attractive value-added multimedia services and content, MVNOs also deliver solutions to expand the existing customer reach of mobile network operators (MNOs). The MVNOs provide a ready-made base of loyal customers and offer strong brand power. These partnerships allow MVNOs to establish themselves as wireless service providers without encroaching on the carrier’s territory. The success of MVNOs such as Virgin Mobile and TRACFONE Wireless, Inc. will trigger an avalanche of symbiotic relationships with brands such as ESPN and AOL Time Warner seeking to enter the MVNO market.
This Frost & Sullivan research service on the U.S. MVNO markets offers an in-depth analysis of the various industry dynamics while creating an extensive reference for market forecasts and growth estimates. The study provides information on market trends, drivers, restraints, and challenges. It also presents an insight into the competitive environment in the MVNO market, thus providing a benchmark for companies to develop through competitive strategies.
Effective Marketing Segmentation Key to Increasing Market Share
Combined with their large consumer bases, MVNO companies utilize their branding and marketing skills to effectively segment the wireless market. Their strong brand loyalty also reduces acquisition costs for carriers and MNOs, facilitating lucrative partnerships. The segmenting allows MVNOs to offer wireless products customized to the end-user lifestyles, thus maximizing this growing demand for wireless data services and the transition to third generation (3G) networks.
With a thorough knowledge of customers through their existing businesses, MVNOs possess the ability to market their services to specific segments by employing branding and lifestyle marketing techniques, observes the analyst of this research. This proves to be a successful policy for MVNOs as they continue to grow their wireless endeavors while providing ‘differentiated’ services to their target segments.
Entry of MVNOs Drive Positive and Amalgamated Growth in the Wireless Sector
MVNOs will drive collaborative growth - between the MVNO, the service provider, and other participants such as content providers - in all facets of the wireless market. MVNOs will benefit by their vast expertise in branding and marketing, which allows them to deliver lifestyle products that are in demand. Wireless service providers will profit from the additional revenues and the utilization of their unused network capacity. These arrangements also do not pose any competitive threats such as the MVNOs cannibalizing the carrier market.
As MVNOs lack the expertise relevant to the telecom industry, mobile virtual network enablers (MVNEs) will also benefit since they provide services such as customer care, billing, content, and open source software (OSS) platforms, elaborates the analyst. Device manufacturers are also likely to profit as an increase in subscribers will amount to a spurt in demand for mobile phones and wireless converged devices.
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