The MVNO business is set to soar, despite its meager success to date, TeleGeography believes.
Just this year alone the SKT-invested Helio was sold for a net $14 million, while Hong Kong’s oldest MVNO, Trident, ran out of cash and network partners.
But TeleGeography believes the MVNO subscriber base will double over the next four years as the business model takes hold in emerging markets.
“'As markets approach maturity and as regulatory regimes look to increase competition and better serve diverse populations, MVNOs will be allowed to launch services in many new countries,” senior research analyst David Leach said.
To date the business model has predominantly been a feature of developed telecom markets, the research firm said.
And MVNOs are currently either prohibited or in early stages of development in all of the developing markets which are driving subscriber growth – such as the BRIC nations and Indonesia.
As a result, virtual operators have not managed to keep their subscriber growth on pace with the overall wireless market, and saw their share decline from almost 3% of the world's subscribers in 2003 to just over 2% today.
But these figures have been skewed by shifting market demographics, Leach said. While MVNOs have increased their footholds in western Europe and the US, for example, these regions now account for just 20% of the world's subscribers, down from 40% in 2003.
And as virtual operators finally make inroads in emerging markets, MVNO growth will gain momentum around the world in the near future, he said.