Top 4 trends in the mobile virtual network operator market
It is anticipated that the mobile virtual network operator (MVNO) market will reach US$125bn by 2027.
The most recent study by Global Market Insights found that a large increase in internet and mobile usage has created a greater need for cost-effective telecom services. This is in turn instigating the adoption of MVNO services.
This type of service sees the MVNO enter a contract with a mobile network operator (MNO) for obtaining bulk access for network transport services at wholesale rates, and assign retail prices independently. The MVNOs provide high-quality data services to customers at lower prices that are driving their demand to a great extent.
MVNOs are gaining massive traction, as they tend to provide a better customer experience and a more customised service than MNOs. They are mainly focused on offering services instead of just maintaining the telecom network and infrastructure, which is increasing their adoption and enhancing the market space.
An overview of the four major trends that are set to transform the outlook of the MVNO market is outlined below.
1. Development of innovative solutions by market participants
Encouraged by the rising demand, numerous industry players are focusing on developing innovative solutions to effectively cater to consumer demand and gain a competitive edge in the market. Quoting an instance in 2021, Infobip introduced the full range of CPaaS solutions for mobile virtual network operators. According to the company, this offering aims to enable the telco providers to deliver exceptional customer experience while reducing operational costs.
2. Growing adoption of full MVNO model
The deployment of the full mobile virtual network operator model is being largely supported by its ability to provide complete control over the core network infrastructure. The complete control of the network allows the companies to improve the quality of services being offered. As a result, various light mobile virtual network operators are now showing an inclination towards a full business model.
3. Increasing distribution through branded resellers
Branded resellers usually have a popular brand and a complex retail infrastructure. They are known to resell services on margins after negotiating the cost with the MNO. The resellers control their sales and marketing processes and differentiate only in terms of brand identity, value and pricing. A branded reseller offers various distribution channels and an existing client base from which it can increase its sales. It is the simplest MVNO model and requires lesser investment, which is increasing its adoption by the MNO. The resellers repackage the existing telecom services, which reduces the time to mobile virtual network operator market.
4. Flourishing telecom industry in Latin America
The mobile virtual network operator market in Latin America is observing a robust expansion with the growth of the telecom industry in the region, with Mexico leading the regional business space. Mexico has a population of around 129 million people as of May 2021, where around 87 million are unique mobile subscribers. The country is known to have a strong mobile services ecosystem that consists of around 31 MVNOs. The number of mobile virtual network operators in Latin America has increased in recent years.
Ongoing penetration of smartphones and the growing need for affordable telecom services are the major factors that are strongly influencing the mobile virtual network operator market growth. Increasing government initiatives and technological advances introduced by market players are further bolstering the industry landscape.
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