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The Future of MVNOs
Tariff Consultancy, May 2007, Pages: 173
This report is the most thorough ever published survey examining the current state of play of MVNOs in 37 countries around the globe. Profiles of the main players in each of the main mobile markets where access onto the incumbent’s network has been allowed and a summary of the key MVNO players in each of those countries are provided.
The report evaluates the role of the country regulator in enabling the MVNO to become established in the some key markets, where the finding reveals that the most logical approach is not to prescribe but to ensure that the dominant mobile provider does provide access to the MVNO.
The research discovers a range of different approaches and trends that are now driving the market. The mobile market globally is becoming more fragmented with the power of brands and distribution – together with the emergence of new low-cost MVNE aggregators – favouring the development of new niche MVNOs based on a small social community. The report features case studies based on in-depth interviews with BT, Lebara, Virgin Mobile and Blyk, each using a different business model.
A section provides a ranking of the existing 30 MVNO countries that we have identified according to six broad criterias and identify the most attractive MVNO markets for future investment.
A section looks at pricing since the MVNO’s have entered the market.
The final section provides a forecast of the MVNO subscriber base in 5 years time.
The Future of MVNOs - table of contents
List of Tables and Charts
Chapter One – Analysis of the Mobile Virtual Network Operator (MVNO)
1.1 Exactly what is an MVNO?
1.2 A definition of an MVNO and MVNE
1.3 Types of MVNO business model
1.4 The role of an MVNE
1.5 The size of the MVNO market
1.6 Growth rate for the MVNO market
1.7 New types of MVNO provider
1.8 The attractions of an MVNO
1.9 Key characteristics of the MVNO market
1.10 The regulator’s view of an MVNO
1.11 Case study – The introduction of MVNOs into the French market
1.12 The process of MVNO introduction in France
1.13 The French Fair Competition Authority report
1.14 Case study – Auchan Telecom MVNO
1.15 The MNO provider’s view of an MVNO
1.16 MNO and MVNO agreements
1.17 Advantages and limitations of forming an MVNO
1.18 Types of MVNO
1.19 Examples of MVNO market sectors
1.20 Examples of Pre-Paid MVNOs
1.21 Examples of Post-Paid MVNOs
1.22 When to provide an MVNO
1.23 MNOs that are seeking to become an MVNO
1.24 Growth of the Pan-European MVNO
Chapter Two - The Main Worldwide Markets for MVNOs
2.2 Outline of the main markets (Europe; the Americas and Asia) – 37 countries
2.2.1 Outline of the main MVNO markets in Europe including: Austria; Belgium; Czech Republic; Denmark; Finland; France; Germany; Iceland; Ireland; Italy; Israel; Luxembourg; Poland; Portugal; Romania; Russia; Slovakia; Spain; Sweden; Switzerland; the Baltic States and the UK.
2.2.2 Outline of the main MVNO markets in the Americas including: USA (special section); Bolivia; Chile and Canada.
2.2.3 Outline of the main MVNO markets in Asia & Australasia including: Australia; China; Hong Kong; India; Indonesia; Japan; Malaysia; New Zealand & Taiwan.
2.3 Recent MVNOs established
2.4 MVNO brands active in a number of countries
2.5 MVNOs in new countries
2.6 Tele2 MVNO presence
2.7 Pulling back to the home market
2.8 MVNOs formed by incumbent operators
2.9 The main MVNO markets
Chapter Three – The Impact of Regulation on the MVNO Market
3.2 Regulatory intervention by country
3.3 Regulation in the Netherlands example
3.4 Regulation in Norway example
3.5 Regulation in the UK example
3.6 Examples of regulatory interventions and the MVNO
3.7 The regulator’s role in enabling market access
Chapter Four – MVNO Pricing in Practice
4.2 MVNO pricing in seven countries: Austria, Belgium, Germany, the Netherlands, Switzerland and the UK
Chapter Five – Case Studies of Existing & Proposed MVNOs
5.2 BT Mobile case study
5.3 Virgin Mobile UK case study
5.4 Blyk Mobile UK case study
5.5 Lebara Mobile case study
Chapter Six – Global MVNO Growth Conclusions
6.2 Advantages of Post-Paid services
6.3 Potential new service opportunities for MVNOs
6.3.1 Advertising revenue
6.3.2 Content add-ons
6.3.3 New forms of Fixed Mobile Convergence
6.3.4 New forms of MNO
6.3.5 New forms of MVNE
6.3.6 The rise of the Next Generation MVNO
6.4 The importance of unique content
6.5 The changing valuation of MVNOs
6.6 Conclusion – the present & future prospects for MVNOs
6.7 The development of content-based MVNOs
6.8 Attractive markets for the MVNOs
6.9 MVNO five year subscriber forecast – 2007 to 2012
Appendix I – Glossary of terms
Appendix II – List of worldwide MVNOs
The Future of MVNOs - list of figures and charts
Table 1. The distinction between the MNO; MVNO and service provider
Table 2. Virgin Mobile UK – annual operating cost breakdown
Table 3. Services & resources provided by the MNO; MVNE and MVNO
Table 4. MVNO market size – analysts forecast
Table 5. Main MVNOs by subscriber
Table 6. The numbers of MVNO worldwide by country
Table 7. MNOs with multi-brand MVNOs
Table 8. MVNO country openings
Table 9. Selected MVNO service launches
Table 10. The MVNOs that failed during 2006
Table 11. MVNOs that were acquired in 2006
Table 12. Selected European countries opening to MVNOs
Table 13. Selected French MVNOs – Target audience
Table 14. Examples of MVNOs in Europe
Table 15. Examples of Pre-Paid MVNO services
Table 16. Examples of Post-Paid MVNO services
Table 17. Lebara Mobile services by country
Table 18. Carphone Warehouse mobile services by country
Table 19. For MVNO service providers in the following 17 countries: Austria; Belgium; Denmark; Finland; France; Germany; Italy; Portugal; Russia; Netherlands; Norway; Spain (applicants); Sweden; UK; USA; Canada and Australia.
Table 20. Main new MVNOs announced in 2007
Table 21. Fastest growth MVNO operators by subscriber numbers
Table 22. Debitel’s non-German MVNO operations
Table 23. Instances of regulatory intervention
Table 24. Examples of MVNO pricing in seven European markets including: Austria, Belgium, France, Germany, Netherlands, Switzerland and the UK
Table 25. Summary positioning – BT Mobile
Table 26. Summary positioning – Virgin Mobile UK
Table 27. Summary positioning – Blyk Mobile
Table 28. Summary positioning – Lebara Mobile
Table 29. Types of MVNO business model
Table 30. MVNO acquisition costs
Table 31. Countries with estimated MVNO numbers
Table 32. The maturity of key MVNO markets around the world
Table 33. Examples of MVNO service differentiation
Table 34. The most attractive markets for MVNOs
Table 35. A five year MVNO subscriber forecast (2007 to 2012)
Chart 1. Capex costs against sales for the MNO & MVNO
Chart 2. Virgin Mobile UK – annual operating cost breakdown
Chart 3. MVNO EBITDA compared with MNO
Diagram 1. Types of customer segmentation by the MVNO
Diagram 2. The MVNO Mobile market life cycle
Diagram 3. Types of MVNO differentiation strategy
Diagram 4. E-Plus strategy Pre-August 2005
Diagram 5. E-Plus strategy Post-August 2005
Diagram 6. Stages of development in the MVNO market
Diagram 7. Traditional MVNO business model
Diagram 8. Evolved MVNO business model
Diagram 9. Mobile content value chain
Diagram 10. Generic forms of MVNO differentiation
The creation of the Mobile Virtual Network Operator (MVNO) in the mobile sector is a relatively new phenomenon.
The MVNO has quickly become established in developed markets with over 370 MVNOs – under a wide definition - currently in operation worldwide.
Wherever possible we have concentrated on the specialist MVNO providers, where there is a separate brand and separate business from the controlling MNO. However the MNO is now acquiring MVNOs and is starting a “multi-brand” MVNO strategy.
In countries such as the US many mobile providers are accorded the status of MVNO when they are in reality resellers. In countries such as Russia where there is no formal wholesale mechanism put in place by the Ministry of Communications - the so-called MVNO does operate in most cases as a pure reseller of the MNO product.
In our research we have indicated where an MNO is pursuing a “multi-brand” strategy which appears to the market as an MVNO – with separate brand and subscriber base - when in reality it is controlled by the mobile network operator.
By numbers of operators, the main markets remain the US, Germany, Belgium and the Netherlands while both France, Spain – and now Italy - are spawning a significant number of new MVNOs and will account for a large proportion of future MVNO subscriber growth.
As each country market for mobile operators approaches maturity the increase in subscriber growth slows and the focus changes to subscriber retention and maintaining ARPU through providing additional services and service bundles.
In the maturing market the success of the MVNO operator will depend to the degree the company can adjust it market position to focus on increasing market share through providing added value in the eyes of the customer.
An MVNO without the backing of a larger parent company may find itself vulnerable in such a position which helps explain why there has been a process of consolidation between the different telecoms providers involving an MVNO.
NTL has acquired Virgin Mobile of the UK and in Germany the MVNO market has further consolidated with the acquisition of MVNO provider Telco by larger MVNO rival Drillisch.
In a maturing market stand-alone MVNOs which do not possess sufficient differentiation or scale have been forced towards the exit, as the example of the closure of pan-European MVNO operator Easymobile in Europe and ESPN Mobile in the US shows.
But in the rush to provide differentiation it is the MVNO which frequently is becoming the most creative mobile player in the market as a whole. In the US start-up MVNO Amp’d is providing new types of content services. In the UK the forthcoming launch of venture-capital backed mobile provider Blyk provides the first example of an MVNO funded through an advertising model, rather than through subscriber rental fees or call charges.
Elsewhere in Europe, the launch of charity mobile services (as in the Netherlands) and ethnic services means that the MVNO is discovering a niche market which has not been serviced by the existing Mobile Network Operator (MNO) and reinforces the MVNO as a valid business model which will continue to be a source of innovation in the mature market.
In these markets we believe that the distinction between the MVNO and MNO provider will become less and less clear cut. The differentiation between providers will be based on brand awareness and the ability to provide suitable content for the user. The mobile phone is poised to become a gateway to other forms of content including music downloads, video sharing and the formation of a social network.
In this new world the inability of an MVNO to control a network may be an advantage as it can provide services from a number of different content providers.
But most of the future growth of MVNOs will come from the entry of the MVNO model into new countries where to date the mobile network operator has held sway. We believe that the MVNO growth recently seen in France and Spain will be replicated in other countries too as regulators use the MVNO as a half-way house and a faster way of introducing more competition into a market than licensing a new network entrant.
We believe that there is a limit to the progress that a pure MVNO model can make. Even so in mature markets such as Norway and Sweden the MVNO continues to take market share from the MNO. In short the MVNO has the advantage of superior client acquisition over the MNO as it is growing from a smaller base. In the Netherlands the sheer number of new MVNO entrants shows that the model continues to be attractive to a large variety of niche operators.
We believe that the MVNO model is durable. But the new entrant is no longer likely to capture a large market share unless the business model is changed away from a conventional “no frills” approach. This includes focussing on value added services, community services and an advertising only model. It is the MVNO provider which is becoming the most innovative in the market and which is now introducing the new business model into the mobile market.
Some of the Companies mentioned include:
- Virgin Mobile
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