Mobile Virtual Network Operator (MVNO) Market Industry Outlook, Growth Prospects and Key Opportunities

Global Mobile Virtual Network Operator (MVNO) Market: Snapshot

A highly positive short-term driver for mobile virtual network operators is the displacement of excess bandwidth by 3G telecom operators into MNO and MVNO for leverage. A lot of 3G bandwidth is going unused in developed economies, which can be easily rented out to mobile virtual network operators. The operators can use this to boost their revenue generation and add better customized services. This is currently working because most mobile virtual network operators do not require 4G/LTE internet access for gauging consumer parameters and to perform setups, which still are essential to an MVNOs function.

The governments of several nations have also stepped in to show their support to MVNOs for maintaining a more efficient use of the current bandwidths that are available. The European Commission has played a key part in the formation of several milestone MNO and MVNO mergers. MNOs, through the growing use of MVNOs, are gaining large numbers of virtual customers. This is consequently helping MNOs reduce the overall cost of customer acquisition by reducing the required promotional and marketing programs.

This, however, can be a double-edged sword for MNOs that are not particularly welcoming of the changes that MVNOs are bringing. There is a strong chance for MVNOs to cannibalize MNO business, which the latter will definitely see as a key threat over the coming years.

With all the above factors in the equation, the global market for mobile virtual network operators is expected to expand at a positive CAGR of 7.4% in terms of revenue, from 2015 to 2023. This revenue is expected to reach US$45.86 bn by the end of 2016 and US$75.25 bn by the end of 2023.

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Europe Trumps Implementation Rate of Mobile Virtual Networks

Europe is expected to remain the leading region for the use of mobile virtual networks, due to the large-scale implementation of MVNOs in Western Europe. This region is showing a steep incline in the competitive sense along with a highly positive support system established by the region’s governing bodies. The practices by MVNOs in Western Europe are quickly being adopted in Eastern Europe, which is showing a speedy rate of development and incorporation of mobile virtual networks. Compared to other regions, the market for mobile virtual network operators in Europe is already saturated. The high level of competition in this region is resulting in the reduction of ARPU and many companies are attempting to differentiate themselves by offering unique data-related services or value-added services.

North America follows in second place in terms of MVNO adoption. This region offers a great infrastructure of high-speed 4G networks that a lot of internet players are using to turn into MVNOs. This allows them to generate greater profits.

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Businesses Fine Greater Scope of Subscription from MVNOs

With business and consumer being the two key subscriber bases of mobile virtual network operators, there is an extremely high demand for MVNOs by consumer-oriented subscribers. This segment has led the market due to the ability of players to provide low-cost data and voice services. On the other hand, businesses have shown an extremely fast growth in the demand for mobile virtual networks as they can use them to establish secure and professional applications and communications portals at low costs, similar to consumer-based subscribers. The possibility of a large-scale and customized implementation of these services for businesses is highly appealing.

The key mobile virtual network operators in the market today include AT&T, Inc., Lycamobile Group, Sprint Corporation, T-Mobile AG, Verizon Communications, Inc., Citic Telecom International Holding Limited, Telefonica S.A., Tracfone Wireless, Inc., Truphone Limited, and Virgin Mobile.

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