MVNO Business to Grow Outside North America, Europe

The mobile virtual network operator business is headed for growth, and most will come from regions other than North America and Western Europe, says TeleGeography.

Globally, growth in wireless subscribers has been driven predominantly by explosive growth in a small number of developing countries, such as China, India, Russia, Brazil, Indonesia, Vietnam and Pakistan. These are countries in which MVNOs are either prohibited or at a nascent stage of development, so the ultimate impact on the MVNO market is not yet clear.

In 2003 MVNOs accounted for seven percent of subscribers in Western Europe and North America. At the end of June 2009 wireless subscribers had grown by almost 60 percent in these two regions to reach 800 million, and MVNOs’ share had increased to over nine percent.

In contrast, from 2003 to mid-2009 the number of wireless subscribers in regions other than Western Europe and North America more than quadrupled to reach some 3.5 billion. However, MVNOs have yet to make much impact in these higher growth markets: outside of Western Europe and North America, their share of the market remains less than 0.5 percent.

So while MVNOs have been growing strongly in Western Europe and North America, those two regions account for an ever-smaller portion of the world’s wireless subscriber base – it slipped from almost 40 percent to less than 20 percent. That suggests that future MVNO subscriber growth necessarily will come from other regions.

In 2003, Western Europe and North America accounted for well over 90 percent of all MVNO subscribers and, despite some growth elsewhere, these two regions still account for over 80 percent of the total.

TeleGeography’s latest research predicts that MVNO growth will gain momentum all around the world over the coming five years, as MVNOs are legalized in new countries where they are not allowed at present.