MVNOs in Eastern Europe fail to compete, with churn and QoS blamed

Mobile virtual network operators in Eastern Europe are still struggling to gain market share as they battle with established operators on pricing and quality of service (QoS) terms, according to research firm InfoCom. 

Having been issued with licences starting in 2004, MVNOs in Bulgaria, Hungary and Poland have gained less than 4 per cent of the market as of the third quarter in 2010, according to InfoCom. The extreme example is Poland, where, after six years of being active, the 13 MVNOs in the country have only managed a combined penetration of 1 per cent of the overall market.

This compares with an average of 10 per cent share achieved by MVNOs in some Western European markets.

The research firm adds that there are currently 13 MVNOs operating in Poland, four in Hungary and two in Bulgaria. InfoCom stated that MVNOs preparing to launch include News Mobile in Bulgaria and Red Bull Mobile in Hungary.

However, InfoCom believes that MVNOs in Eastern Europe will continue to experience problems in making headway due to ongoing churn and a wide inconsistency in mobile termination rates, preventing the MVNOs from competing effectively on consumer pricing.

On a more positive note, the study also found that some MVNOs had adopted a more innovative approach including a no-frills strategy in Bulgaria and Poland, a focus on data services in Hungary and a VAS-oriented MVNO in Poland. Some Hungarian MVNOs are now also offering a bundle of mobile, fixed, cable TV and broadband services to successfully reduce churn and gain new subscribers.

For more:
- see this InfoCom release

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