Mobile Virtual Network Operator (MVNO) Market Size, Share, Development, Growth and Demand Forecast to 2022 - Industry Insights by Type (Discount, Cellular M2M, Business, Media/Entertainment, Migrant, Retail, Roaming, Telecom), by Category (Post-Paid, Pre-Paid), by Business Model (Full MVNO)

Mobile Virtual Network Operator (MVNO) Market Overview

The global MVNO market valued at $46.22 billion in 2015 is forecasted to grow at a CAGR of 9.8% during 2016-2022. MVNOs focus largely on customer, community and value-added services. Technical flexibility is expected to be the major factor driving the growth of this market during the forecast period. The growth in number of new telecom subscribers is expected to slow down considerably during the forecast period, owing to the maturing of telecom market. However, the growing demand of mobile internet in developing countries is expected to provide significant growth opportunities for vendors during the forecast period.

GLOBAL MVNO MARKET, BY TYPE, $M (2012 - 2022)

Mobile Virtual Network Operator (MVNO) Market Dynamics

The mobile virtual network operator business model and strategies are evolving with the changes in the industry dynamics, and regulatory evolution. The players are shifting from discount based approach to a value-added services and product innovation based approach. The balance between cost and product differentiation is expected to have high impact on the preferred business model during the forecast period. The full business model is expected to be the most dominant business model in the emerging markets, such as China and India, during the forecast period. The second brand and branded reseller business models are expected to witness faster growth in developed region, such as Western Europe and North America, where the MVNO market has reached more than 30% in selected countries in 2015.

Trends

While traditional full MVNO market players accounted for majority of the revenue in 2015, the new players in the market are entering with their focus on value added services. Banks, smartphone vendors, supermarkets, media companies and others have entered the market with new business models. These new players are giving stiff competition to the existing players in terms of cost differentiation. As a result, the traditional players in the MVNO market have started focusing on value added services such as managed services, IP PBX (private branch exchange) and business solutions instead of price differentiation. The mobile virtual network operators in business segment are yet to make their presence felt in both the developed and developing countries. The inclusion of value added services is expected to add new business segments during the forecast period.

Opportunities

China accounted for the largest telecom market in the world followed by India in 2015. The Telecom Regulatory Authority of India (TRAI) regulates the Indian telecom market with directions for revenue sharing and unified access license. Both India and China telecom market has both public and private players. With telecom subscriber of more than 1 billion, China provides ample growth opportunity for the new players. Similarly, the opening up of Indian telecom market for mobile virtual network operators is expected to provide growth opportunity to the players of the MVNO market.

Growth Drivers

The growth of MVNO market largely depends on the limitation of MNOs in marketing and distribution strategies in a particular geography. The successful one’s make optimum utilization of the existing telecom infrastructure in a geographical division, such as media and telecoms brands, channel infrastructure, and customer databases of MNOs. Also, the success of mobile virtual network operator brands depends largely on unique brand positioning and value proposition to attract target customers, such as specific ethnic groups, including migrant workers and tourists. Identification of emerging niche telecom market by mobile virtual network operators in a region through innovative marketing channels that is beyond the reach of MNOs is expected to drive the MVNO market during the forecast period. Moreover, the segment-targeted pricing strategies and innovative distribution tactics by the players of this industry in developed countries is also expected to drive the growth of this market during the forecast period.

Hindrances

The vendors operating in the emerging MVNO markets are required to differentiate themselves from MNOs through their business model. Without proper support from telecom regulators, the mobile virtual network operators are likely to struggle in catering marginal niche segment of the market. The entry of these operators can catalyse the process of the telecom industry expansion in a region.

Mobile Virtual Network Operator (MVNO) Market - Competitive Landscape

The intensity of rivalry in the MVNO market is medium. The major players operating in this industry are primarily catering to the mature markets of Europe and North America and hence, the degree of rivalry among major players is high. However, competition in Asia-Pacific and African players are relatively low owing to the large amount of unutilised mobile spectrum and limited players of this field in the region. Moreover, the lower price differentiation of large companies along with high fixed cost in mobile virtual network operators increases the degree of rivalry among the industry players.

As of 2015, more than 1,300 mobile virtual network operator vendors are operating globally. Europe accounted for the majority of vendor’s concentration with more than 500 operators from the MVNO market in the region. Asia-Pacific accounted for second most popular destination for the operators from this industry in 2015; and it is closely followed by North America. Some of the major companies operating in the global MVNO market include AT&T Inc., Verizon Communications Inc., T-Mobile AG, CITIC Telecom International Holding Limited., Truphone Limited, Telefonica S.A., Virgin Mobile, Tracfone Wireless, Inc., and Lycamobile Group.