Page 35 - Mobile World Daily - Day 2

MVNOS | ANALYSIS

Calum Dewar,
Forecasting Manager, GSMA Intelligence
www.gsmaintelligence.com

How MVNOs target
different market segments

Almost one thousand MVNOs were in Pacific (129) and North America (107). By Market segmentation by category, MVNOs and sub-brands, global, 2014
operation in 2014, according to new contrast, the MVNO sector remains in its
GSMA Intelligence data, targeting infancy in Sub-Saharan African markets with 10% MVNO
distinct customer segments just eight MVNOs across the region. 21% Sub-brand
‘International’ MVNOs, i.e. those that target
The number of MVNOs in operation roamers and thus operate across multiple 4%
worldwide rose to almost one markets, make up ten per cent of global 11% 3%
thousand by the end of last year, due MVNOs.
to regulatory policy designed to increase 16% 38%
competition and a growing interest in the MVNO MARKET SEGMENTATION 8% 2014
MVNO market from ecosystem players such 26% Discount
as ISPs and device manufacturers, new GSMA Intelligence has identified eight 8% Cellular M2M
research from GSMA Intelligence has found. separate categories of MVNOs, namely Business
discount, telecom, media/entertainment, 11% 23% Media/entertainment
Regulators have been particularly active in migrant, retail, business, roaming and M2M. Migrant
Europe, which is home to two thirds of ‘Discount’ and ‘telecom’ (i.e. an MVNO that 12% 8% Retail
domestic MVNOs, with the European forms part of a range of telecom services Roaming
Commission having begun applying such as fixed phone and broadband) are the Telecom
conditions on MVNO access before most prominent types of operation,
approving mergers between operators. accounting for 47 per cent of the global Source: GSMA Intelligence
Meanwhile, internet players such as MVNO market, while 18 per cent are owned
WhatsApp and Alibaba and device by companies from adjacent industries (e.g. its UK brand in Q3 2014, while in retail, Italy’s mature, saturated markets in Europe, North
manufacturers including Xiaomi have all retailers, banks, TV or media organisations), PosteMobile had 3.2 million. However, it is America and Asia Pacific – the average
launched MVNOs in the last year, and leaving 35 per cent of the market to important to point out that a number of high- penetration rate for countries that feature
emerging asymmetric business models (e.g. specialised providers focused on segments profile brands such as BestBuy, Time Warner sub-brands stands at 127 per cent. In terms of
the rumoured entry by Google in to the such as business, migrant, M2M and roamers. and Comcast have tried and failed in the categories, discount, media/entertainment
MVNO market) could potentially prove Globally, 93 MVNOs offer data-only services MVNO market, eventually closing or merging and retail take the largest share of the sub-
disruptive. via dongles, tablets etc., accounting for nine their operations. Indeed many MVNOs have brand market with 38 per cent, 23 per cent
per cent of the market. gone out of business in recent years due to and 16 per cent respectively.
As of the end of 2014, the world’s mobile the low margins and highly competitive
network operators (MNOs) host 992 mobile Media/entertainment and retail MVNOs nature of the market, especially in Europe. THE ROLE MVNOS PLAY IN DRIVING
virtual network operators (MVNOs) and 260 have generated a considerable number of OPERATOR GROWTH
MNO sub-brands. This represents a total of connections as many operate under well- OPERATOR SUB-BRANDS
more than 1,250 mobile service providers known brands that reach beyond the MVNOs are an attractive strategy to MNOs
worldwide hosted by MNOs, in addition to telecoms industry. So while these categories GSMA Intelligence has also recorded 260 for several reasons. They can use them to
their own core brands. Our research shows respectively account for just eight per cent MNO sub-brands spread across 56 countries. gain more customers through different
that MVNOs remain most prevalent in and ten per cent of MVNOs worldwide, both Sub-brands differ from MVNOs in that they brands, increase their market share in mature
mature markets where penetration (based on include large standalone operations in terms are wholly-owned and operated by their markets, expand into niche segments, and
connections) has surpassed one hundred per of connections. For example, in the MNO parent, despite being marketed also generate additional revenue from leasing
cent. Europe is home to two thirds of media/entertainment sector, Virgin Mobile independently of that MNO. Some MVNO out their networks.
domestic MVNOs (585), followed by Asia reported more than 3 million connections for brands also operate as MNO sub-brands;
those that have international presence Our research found that for the 14 MNOs
ABOUT GSMA INTELLIGENCE include Virgin Mobile, which is a sub-brand that report hosted MVNO connections,
in Australia, Canada, India and the US, and MVNOs made up 12 per cent of total
GSMA Intelligence is the definitive source of global mobile operator data, Red Bull Mobile, which can be found in connections on average as of Q3 2014.
analysis and forecasts; and a publisher of authoritative industry reports Austria, Belgium, Hungary, Poland, South However, MVNOs support MNO connections
and research. Our data covers every operator group, network and MVNO Africa and Switzerland. growth to varying levels. For example, as a
in every country worldwide – from Afghanistan to Zimbabwe. It is the market where handsets are largely
most accurate and complete set of industry metrics available, comprising Some 48 per cent of sub-brands offer unsubsidised and 48 per cent of connections
tens of millions of individual data points, updated daily. prepaid tariffs only, while the proportion that are on prepaid tariffs, Belgium is a country
GSMA Intelligence is relied on by leading operators, vendors, regulators, are contract-only stands at 21 per cent. Sub- where MVNOs are well positioned to
financial institutions and third-party industry players, to support strategic brands tend to be focused on prepaid tariffs influence MNO growth, and MVNO
decision-making and long-term investment planning. The data is used as as, like MVNOs, they are used by operators to connections accounted for a third of
an industry reference point and is frequently cited by the media and by attract new customers in lower price Mobistar’s 4.6 million connections in Q3
the industry itself. Our team of analysts and experts produce regular segments without diluting their core brand 2014. Conversely, in Finland, where just
thought-leading research reports across a range of industry topics. proposition or exposing it to excessive price seven per cent of the connections base is
competition. As such, the use of sub-brands prepaid, only two per cent of DNA’s 2.5
is a strategy that tends to be limited to million connections were MVNOs.

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