Observations from the The MVNO Directory 2011

Observations from the The MVNO Directory 2011 - 5th Edition

The 2011 edition of the MVNO Directory landed in my in-box last week – now in its fifth edition apparently – and listing some 645 operations globally.

But what caught my eye was the fact that the publisher claims that the 1st edition of The MVNO Directory tracked a market of just over 200 MVNOs just five years ago, so that would suggest that the 'market' is growing at the net rate of roughly 90 operations per annum.

This appears contrary to what many observers were actually saying five years ago, when MVNO were considered by many commentators as something of a fad, and would not last – worse, some thought the market was already in decline back in 2006.

Just 5 years on the total now stands at 645 operations, operated by some 515 companies. Effectively a tripling, with new operations constantly coming to market.

The other observation which caught my eye was that just because an operation looks like an MVNO; sounds like an MVNO and behaves like an MVNO doesn’t necessarily mean it IS an MVNO.

Indeed, even those who should know better have made this mistake to their cost. We all knew that Richard Branson runs MVNOs: and that this is a classic Branson model that we can see operating very successfully in the UK; and maybe less successfully in South Africa.

So when Sir Richard jet-ski’d into Qatar in May last year to launch Virgin Mobile in a brand partnership with Qtel, it caught out local MNO Vodafone, who understandably thought a fully fledged MVNO had been launched under its nose.

To further confuse matters, Branson claimed that Virgin Mobile is the fastest-growing and most successful business in Virgin’s history, with more than fifteen million customers globally. And Qatar is the eighth Virgin Mobile branded operation in the world, following on from launches in the UK, Australia, USA, Canada, France, South Africa, and India (although it did fail in Singapore).

However, regulatory authority ictQATAR was quick to point out that it had not issued a third telecommunications service provider licence. And indeed it hadn’t. Virgin subsequently admitted it had found the conventional MVNO model too difficult for it to manage, and that all subsequent ‘operations’ – as in Qatar – are simply a re-badging exercise. In this case, it is Qtel that wants to target the youth market, and is using the Virgin branding as way to create interest.

The MVNO Directory 2011 this year helpfully provides a list of over 550 companies named by other publishers as being active MVNOs, but which the MVNO Directory team believe have been incorrectly identified. And you can understand why this confusion might arise; not only do we have the likes of Virgin who will operate in any mode that maximises revenue and minimises risk; but there are also genuine MNOs who don’t have the regional infrastructure so effectively are roaming in an adjacent country or territory, so have many of the characteristics of an MVNO (doesn't own the infrastructure and has separate billing, branding, etc.) but in reality have a fully-fledged MNO licence.

The 5^th edition of The MVNO Directory of this handy guide was launched late last month, so it is right up-to-date.

The MVNO Directory team also found that in 2011 more MVNOs now offering mobile broadband services, acting as mobile virtual broadband network operators, or MVBNOs. The directory apparently found that currently 120 of the 515 active MVNO operations are offering mobile broadband services using another operator’s network. This accounts for nearly 1 in 4 MVNOs. These findings show that the mobile virtual network operator market has moved on from its infancy, and can no longer be simply dismissed as a mass discount and pre-pay only sector.

Mark Thomas, Director of Network Research, Blycroft Ltd commented: "The rise of the mobile virtual broadband network operator (MVBNO) shows that the virtual market is keeping pace with the spectrum market. Nearly 1 in 4 MVNOs currently offer mobile broadband services and this figure keeps improving. MVNOs are capable of trading within the full arena of mobile offerings, whether this is basic voice through to the latest 4G services. While many MVNOs make a good trade out of pre-pay discount offerings, it is clear that the high ARPU and premium services market is definitely open to MVNOs."

The majority of MVBNOs also offer traditional voice and messaging subscriptions. Their subscribers are signing up for multiple services providing a double revenue stream. These multi-play virtual operators are in effect taking two bites out of their subscribers’ wallets by offering complementing technologies.

Geographically the MVBNOs follow the same markets as MVNOs, with active operations across Asia, Europe and North America. Although the MVNO market is yet to reach into every country, their presence is now felt across every continent.

"For many years analysts have noted the MVNO market as a discount only offering. The thought process being that MVNOs trade on being cheaper than traditional networks (mobile network operators, MNOs) such as Vodafone and T-Mobile. This new research helps to show that MVNOs are in fact capable of offering the same services as MNOs and can revenue high ARPU streams from specific client bases. The sector is capable of data rich services and post-paid offers commonly seen within the MNO sector."Added Mark Thomas.

MVNOs, mobile virtual network operators, are mobile service offerings from organisations which typically neither own licensed mobile spectrum nor operate a physical base station network and backhaul. Of course, there are exceptions to the rule but the essential factor is that an MVNO cooperates with an MNO for network access. MNOs are traditional mobile companies such as Orange, SingTel and Vodafone. For this research, both MVNOs and resellers (which act as the provider to the subscriber) are included.

The MVNO Directory 2011 contains over 1,200 named management contacts. These people are selected from the MVNOs’ senior management teams and feature job titles such as President, CEO (Chief Executive Officer), CFO (Chief Financial Officer), CTO (Chief Technology Officer), CCO (Chief Commercial Officer) CMO (Chief Marketing Officer), Executive and Senior Vice Presidents plus other senior positions, but sadly not direct e-mail or telephone numbers for these people. However 446 profiles have at least 1 contact listed.

I've pulled out some actual sample pages, which give a flavour of the scale and range of these new MVNO across the globe:

So if you are targeting or researching the Mobile Virtual Network Operator market, I think you will find the MVNO Directory 2011 a very handy source of information.

Kind regards

Keith Wallace