Why Does The MVNO Market Continue To Grow?

In 1999, the British OFTEL regulator (The Office of Telecommunications) first proposed the use of the term MVNO (Mobile Virtual Network Operator). Since then, companies around the world, from banks to logistics corporations, have created their own virtual communication operators. .According to a WiseGuyReports report, by the end of 2020, 110.7 million people will use the services of mobile virtual operators (MVNO) in Europe.

The aggregate average annual growth rate of these between 2015 and 2020 is expected to be 5%. WiseGuyReports also came to the conclusion that until 2020 the MVNO market in Germany will remain the largest. It already has 140 mobile virtual operators. Second place in the pace of implementation of this technology will be the UK. The other growth destinations indicated in the WiseGuyReports include Belgium, Spain, Denmark, and Holland.

In Europe, mobile operators (MNOs) need to provide their own infrastructure to mobile virtual network operators. In fact, this “limitation” on MNOs leads to the significant growth of the mobile virtual operator market in Europe. This model gives significant advantages to both an MVNO and MNO, which actually leases unused network bandwidth. In turn, the MVNO saves on the construction of infrastructure and obtained licenses from the regulator. It allows him to offer really low prices to the end consumer for corporate mobile communication services.

Special Conditions at MVNO Market

WiseGuyReports analysts supplied the main list of reasons that affect the MVNO market growth in Europe. Among them – the increasing penetration of smartphones and the active introduction of 4G and 4G + formats. Also, a favorable effect is provided by the expansion of the range of additional services. Breakthrough growth until 2020 can be anticipated not only in the traditional sectors of MVNO. Also, for example, in the M2M segment.

The widespread penetration of smartphones also affects the growing popularity of MVNO in Europe. Also because of the introduction of 4G – 4G + and expansion of the range of additional services offered to users. The most popular business model on the continent will remain the approach one. It assumes various discounts for maintenance in its pricing structure. Its share is 21% of the total market.

20% of those present in the MVNO region practice niche approach. This approach focuses on pensioners, young people, students, and employees of non-profit organizations. Another 19% of operators orients towards business client subscribers. Experts note that a favorable regulatory system remains an important element in the development of the MVNO market. For MNOs special rules of the game are developed on a permanent basis. These rules stimulate competition. They also focus on reducing tariffs and removing barriers for new operators.

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