The MVNO journey: the fine line between success and failure

The landscape for mobile virtual network operators in Europe is very diverse, with some countries having MVNO penetration above 15 per cent (Norway, Denmark, Germany, Belgium) and some others having a very low MVNO penetration under 5 per cent (Ireland, Portugal, Sweden Austria, Finland).

So says Sébastien Crozier, CEO of Orange Horizons, who notes that the level of MVNO penetration depends on several factors, including the presence of underserved market segments, gaps in offerings.

A favourable regulatory environment is, of course, the first prerequisite for a healthy MVNO market, and this is evident in markets such as the Czech Republic, which saw huge growth in MVNOs and secondary brands a year after the market was opened to these virtual providers.

According to Crozier, operators look for MVNOs that will complement their value proposition, limit cannibalisation of their own customer base and ideally expand the market by targeting new customers or new usages. "An MVNO remains a marketing vehicle to capture more market share for MNOs," he added.

At the same time, MVNOs themselves continue to try new business models that have not always been a success, such as some recent examples of ad-funded MVNO failures.

In order to succeed, an MVNO has to provide something that adds value for all parties concerned. Our latest special report on MVNOs explores some of the business models being adopted by virtual operators and asks what MNOs look for when they choose their MVNO partners.--Anne

For more on this topic, see our latest special report.