Wireless Incumbents Will Claw Back

Over the next five years, incumbent mobile service providers will start to reclaim lost market share to virtual operators, in large part because advanced features is growing and low cost calling simply isn't enough reason to go with a virtual operator, says Juniper Research. In fact, Juniper predicts the trend will occur in both developed and less developed mobile markets.

Even in the hot mobile space, demand for simple, low cost calling is declining while use of, and demand for, advanced features is growing. At the same time, basic calling needs increasingly can be met other ways. So the issue, as it always is, is a complex assessment of "value for money."

At one point, the equation was simpler. No-frills voice services delivered what was perceived as lots of value for less money. The value equation now is much more complex, including text, Web access, personalization, dual-mode operation, even the style and feel of a handset, and Apple's iPhone is the best current example of that.

Users these days now have a more complex, richer set of inputs that form the value mobile communications represents. Fashion, for example, now is an important facet of the value.

So though the trend has lagged similar developments in the wireline space, new value requirements are bubbling up in the wireless space as well, with obvious implications for providers of no frills services.