MENA Mobile Virtual Network Operator Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The MENA mobile virtual network operator market is expected to register at a CAGR of 5.3% during the forecasted period. Increasing penetration of mobile devices and technological advancements, such as cloud-based services and government initiatives to deliver better network service access for consumers, are driving the growth of the MENA mobile virtual network operator market.

Key Highlights

• The growing need for communication-based services with enhanced network infrastructure primarily drives the global market for mobile virtual network operators (MVNOs). Another vital reason for spurring growth is the rising popularity of digital services, including cloud-based solutions, machine-to-machine (M2M) transactions, mobile money, etc. In addition, the introduction of novel government initiatives designed to improve consumer access to network services and advance digital services across Europe is boosting demand for MVNOs.
• Mobile virtual network operators are entering developing economies due to low competitors, increasing government initiatives, and the rising adoption rate of cloud services by business organizations. For instance, in November last year, the Communications and Information Technology Commission (CITC) of Saudi Arabia, which is in charge of policing the country's information and communication technology industry, also granted Route Mobile a 'CITC License.' With this development, Route Mobile will be able to serve enterprise clients and the Small and Medium Business sector in Saudi Arabia with its whole CPaaS product suite, including A2P SMS.
• Moreover, the number of telecommunications subscribers is increasing in Middle East &North African countries, which will drive the market. According to the Telecommunication Regulatory Authority, Around 1.9 million fixed-line subscriptions were active in the United Arab Emirates (UAE) as of June last year. In that month, there were approximately 3.7 million internet subscribers in the UAE.
• Additionally, the development of LTE infrastructures, which offer services like VoLTE, ViLTE, and VoWiFi, is positively impacting the world market. Throughout the forecast period, several additional factors, such as the rising popularity of embedded SIM cards and significant investments in 5G MVNO technology to provide effective communication services with low latency, are anticipated to support the global mobile virtual network operator (MVNO) market.
• Further, to ensure that all citizens and nations can fully benefit from the Internet and its economic and social potential, actions must be taken to build Internet infrastructure in a country and develop a digital economy on top of this infrastructure. The COVID-19 situation has dramatically increased awareness of these issues and, in many cases, has hastened the development of solutions. Long-term, new infrastructure can be built, which in many ways meets current needs while adjusting to new Internet uses that emerged during the crisis. Governments can start preparing for this phase by creating or modifying a national broadband plan to expand the availability of Internet infrastructure and guarantee broader digital inclusion.

MENA Virtual Network Operator Market Trends

Deployment of 5G Technologies is Expected to Drive the Market

• According to the Ericsson mobility report, the first 5G subscriptions in the Middle East & North Africa are expected during the forecasted period and will reach around 17 million subscriptions this year. Further, the region will witness a nearly five-fold increase in LTE subscriptions, from 190 million to 860 million in the same timeframe.
• Increased 5G penetration will also fuel the Internet of Things, facilitating the digital transformation of industries and providing mobile operators in the region with opportunities to explore new revenue streams. For instance, smart agriculture initiatives in Turkey and Africa, remote monitoring of oil wells and temporary networks in case of disasters in Saudi Arabia, and Narrowband-IoT (NB-IoT) being used to address utilities and smart meters in South Africa. So, technologies like 5G and IoT will serve the region's diverse operator needs by opening new revenue streams as a result of industry digitization, improving standards of livings in countries across MENA.
• Due to an abundance of opportunities in the enterprise sector, most International service providers are planning to launch their services to maximize their profit. For instance, Sparkle, an Italian service provider, has announced opening of a new Point of Presence (PoP) in Morocco. It will be located in Orange Maroc's open data center and provide corporate communication services to multinational enterprises aiming to expand their business in Morocco. It will also offer ethernet and virtual private IP-VPN networks to Italian and European multinationals to enable intracompany communication and connect their headquarters with their branches in Morocco.
• The COVID-19 outbreak will accelerate the demand for agile and flexible work styles and further push the adoption of communication services that enhance work-life balance. However, telecom regulators have postponed their 5G spectrum auction plans amidst the global pandemic.

Emerging Technologies is Expected to Drive the Market

• Digital transformation across the world is expected to increase the adoption of mainly the Internet of Things (IoT) and machine-to-machine (M2M) in Middle Eastern and North African countries. Hence, it is expected that MVNOs will explore opportunities for emerging technologies such as the Internet of Things (IoT), machine-to-machine (M2M), blockchain, 5G, and Artificial Intelligence.
• Three local carriers - stc, Zain Kuwait, and Ooredoo Kuwait - offer mobile telecommunications services in Kuwait. The ICT sector's regulatory body, the Communication and Information Technology Regulatory Authority (CITRA), has plans to make Kuwait's mobile market more competitive and to produce more readily available and price-competitive mobile services.
• According to a recent update to the company's Worldwide Semiannual Internet of Things Spending Guide, as governments and businesses increase their investments in digital transformation initiatives, IoT spending in the MEA region will increase 15.9% year over year in last year and reach $17.63 billion this year. Public and private sectors are also focusing on improving their provision of customer services, improving the quality of products and services that accelerate their time to market, reducing costs, and increasing their profitability which will encourage them to utilize the emerging technologies and is expected to boost the market growth.
• The growth of MVNOs depends on technological advancements. The consumer market and its various niches, such as foreign workers and younger consumers, were the initial market sector examined by this business model. There is increasing potential for MVNOs to position themselves as B2B service providers due to the development of 5G technology and the internet-of-things ecosystem. The MVNOs business model has made it easier to include new businesses into the global telecoms ecosystem. For instance, MVNOs are used by the automotive and freight industries to provide direct-to-consumer communication services, especially outside urban centers that traditional networks do not cover.

MENA Virtual Network Operator Market Competitor Analysis

The MENA mobile virtual network operator market is concentrated and dominated by a few major players like Virgin Mobile KSA, Lebara Mobile KSA, Swyp (Etisalat UAE), Majan Telecommunication LLC (Renna Mobile), and FRiENDi mobile. With a prominent market share, these major players focus on expanding their customer base across foreign countries. These companies leverage strategic collaborative initiatives to increase their market share and profitability. However, with technological advancements and product innovations, mid-size to smaller companies are increasing their market presence by securing new contracts and tapping new markets. In June 2022, the first mobile virtual network operator (MVNO) in Kuwait, Virgin Mobile Kuwait, was introduced by the Dubai-based Virgin Mobile Middle East and Africa (VMMEA). Wafra International Investment Company, Impulse International for Telecommunications, and VMMEA contributed funding to the expansion into Kuwait.

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