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Latin America Telecom Insider / Vol. 2, No 8, Edition 11 - MVNO Market Offers Solid Growth Prospects for Savvy Operators
Pyramid Research, Inc, November 2010, Pages: 18
As mobile penetration peaks and regulators look for ways to increase competition in Latin America, there will be a gradual movement toward the introduction of MVNOs, putting pressure on Mobile Network Operators (MNOs) to share their infrastructure, according to a new report.
MVNO Market Offers Solid Growth Prospects for Savvy Operators is part of Pyramid Research's Latin America Telecom Insider report series. Published for each of the world's most dynamic regions, Telecom Insiders are packed with trend analysis, industry best practices, market sizing and forecasting, competitor analysis, and case studies, providing you information you can leverage to make better business decisions.
With more than 11 percent of the world's mobile subscriptions, Latin America represents less than 1 percent of the global MVNO subscriber base. MVNO subscriptions in the region will grow at a 27 percent CAGR between 2010 and 2015 to reach more than 1 million subscribers, with Mexico, Brazil, Chile, and Colombia being the first markets to pick up the growth, according to the report.
"Based on the market's potential, operators are still in subscriber-acquisition mode," says Juliana Gomez, analyst for Pyramid Research, "which implies that they would oppose the introduction of MVNOs into their markets." In most Latin American markets, operators are still building capacity to meet demand. Indeed, the spectrum allocated to each operator in some Latin American markets is unable to satisfy data services demand.
"MVNOs can be beneficial for MNOs, regulators, and other companies alike, but their introduction in the Latin American market won't drastically change the market structure," explains Gomez. With the surge of regulations promoting MVNOs in the region, Pyramid expects to see the birth of mass-market MVNOs in the region. "Regulators will force MVNO regulation into the market, so operators should not waste energy opposing the measure; instead, they should start thinking about possible ways to take advantage of MVNOs, but they should act fast to achieve first-mover advantage," Gomez recommends. "MVNOs are an opportunity for telecom and cable providers to expand their portfolio and increase client loyalty."
MOBILE VIRTUAL OPERATORS IN LATIN AMERICA
A. MVNOs are a shortcut to increasing competitiveness in the market, lowering prices and increasing penetration in lower-income segments
B. MVNOs are business partners
C. Mass-market model likely to dominate in Latin America
CASE STUDY: Tesco Mobile, UK
CASE STUDY: MaxcomCel, Mexico
CASE STUDY: Trumpet, US
Table of Exhibits
Exhibit 1: MVNO market share and forecast growth rates, by region
Exhibit 2: Mobile Penetration in Selected Latin American Countries
Exhibit 3: Mobile Subscribers — Latin America
Exhibit 4: MVNO Models and Descriptions
Exhibit 5: Latin-American Mobile Data Revenue
Exhibit 6: Tesco Mobile subscribers, 2003 — 2010
Exhibit 7: MaxcomCel subscribers, 2007 — 2015
Exhibit 8: Latin-American Mobile Data Revenue
As penetration peaks and regulators look for ways to increase competition and to better serve their population, there will be a gradual movement toward the introduction of MVNOs in Latin America. Their introduction won’t drastically change the market’s structure, but it will increase competition, benefiting users and those that understand the pros and cons of MVNOs and who can find ways to incorporate them into their business.
In Europe, North America, Asia and even Africa, many have bought into the MVNO hype. Mature markets have seen a gradual evolution towards MVNO regulation. Latin America is a laggard in MVNO adoption but this lethargy won’t last long, as some countries start implementing MVNO friendly policies.
Successful MVNOs in the region will most likely be cost control stories. Those who can leverage existing assets to control costs while maintaining lower expense levels than their host will increase their likelihood of succeeding.
Published monthly for each of the world’s most dynamic regions, Telecom Insiders are packed with trend analysis, industry best practices, market sizing and forecasting, competitor analysis, and case studies, providing you information you can leverage to make better business decisions.
- Amp’d Mobile
- AT&T Wireless
- Banco do Brasil
- Casas Bahia
- Casas Pernambucanas
- Grupo Pão de Açúcar
- GTD Manquehue
- Lebara Mobile
- Mobile ESPN
- Mobile World
- Telecom Argentina
- Tesco Mobile
- Virgin Mobile
- Western Union
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