MVNOs to boom but voice under pre

The number of consumer MVNO (mobile virtual network operator) subscribers worldwide is set to more than triple in the next six years, according to figures published by industry analyst Juniper Research on Wednesday.

In its latest report, “Consumer MVNOs: Current Status, Future Markets and Strategies, 2006-2012”, Juniper predicts that MVNO subs will increase from around 93 million globally in 2006 to almost 352 million by 2012.

But while voice will continue to generate the lion’s share of revenues, players in developed markets are likely to come under increasing threat from incumbent operators.

Global revenues for MVNOs are expected to rise from $15bn in 2006 to $67bn by 2012, with $42bn coming from voice services. But Juniper warns these figures conceal wide variations by region and in some cases actually mask declines during the second half of the forecast period, particularly in the US and Western Europe.

Juniper analyst, Sue Uglow, said “The current model for no-frills, voice-only MVNOs is under threat from predatory activities by host mobile network operators, although some of the larger players will survive”.

UK-based Virgin Mobile, which set the benchmark by which all MVNOs are measured is one example of MVNO success. The company is presently understood to be looking to break into the Indian market, following operations of varying success in the UK, France, the US, Australia, Canada and South Africa.

Juniper believes that the model for mobile data MVNOs is not working properly as consumers are not yet taking up services in volume because they refuse to pay for data they do not want or need. Disney’s ESPN was forced to fold after less than a year of operations, but on the other hand US MVNO Amp’d surprised with 70,000 subscriptions in the fourth quarter.

To succeed in the long term, Juniper said, voice only MVNOs will need a strong brand and retail presence to achieve and maintain critical mass. Mobile entertainment MVNOs on the other hand are only likely to succeed in niche segments, due to the predominance of on portal services, the analyst believes.

There is also expected to be a influx of MVNOs coming from outside the telecoms industry that are able to identify new market segments or services that do not compete directly with mobile network operators’ offerings, the report predicts.