Mobile Virtual Network Operators (MVNOs), ranging from telecommunication service providers, media companies and supermarkets, to banks, retailers and community groups, who have entered the market without owning a network, have become increasingly relevant players in the mobile communications market in Europe, according to news analysis from Frost & Sullivan.
According to Frost, two main elements have allowed MVNOs to be successful in the highly competitive and saturated European mobile market. Firstly, their unique ability to effectively address the specific needs of different social groups. And secondly, their capacity to offer aggressive pricing strategies.
The analysis finds that there are some very successful MVNOs, with subscriber numbers ranging from a few thousands to millions. In Europe, at the end of 2006, the analyst says, the typical number of subscribers of an MVNO could vary from 5,000 to 5 million.
MVNOs are not the Cinderella of the European mobile market, notes Frost & Sullivan Research Analyst Saverio Romeo. They are able to aggressively compete with the main mobile network operators, and are effectively addressing the mobility needs of specific social groups that big mobile operators find difficult to reach.
At the end of second quarter of 2007, there were 355 MVNOs in operation or ready to start functioning in Europe. This number will increase over the next three years, says Frost. The market presence of MVNOs has grown, particularly in Northern European markets, where the phenomenon started between the late 90s and 2000. MVNOs are at an early stage in Southern and Eastern European markets. However, their numbers are growing sharply and many other organisations are ready to enter the market.
Ultimately, says Frost, the success of MVNOs will depend on their ability to offer low prices and high-quality customer management, and to address the needs of specific social groups. Accomplishing these three elements, while challenging, is also critical to their being able to compete in the highly dynamic European market.
Aggressive price strategies have helped MVNOs to attain significant market shares even as more vertical strategies, such as targeting ethnic communities, have allowed some MVNOs to move smoothly and successfully into niche markets, says Romeo. For MVNOs, identifying the right market segment is a key for being successful in the highly competitive mobile market.
Frosts analysis, Mobile Virtual Network Operators: Emergent Participants in the European Mobile Market is part of the Mobile and Wireless Growth Partnership Service programme, which also includes research in the following markets: Mobile WiMax, xMAx and 3G LTE - Analysis of Mobile Broadband Technologies, and European Mobile Outlook. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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