Mobile virtual network operator business models traditionally have worked best in a relative handful of developed markets, centered in Western Europe. In some of those markets, MVNOs have market share as high as 41 percent, and as low as 11 percent.
Now it appears Microsoft might itself become a MVNO, as a way of supporting enterprise tablet and PC customers. The initiative seems strictly focused on data--not voice or mobile phones--and also aimed at business customers.
It might be worth speculating on the potential for such an MVNO to reach a $1 billion revenue level for Microsoft, and also potentially represent $5 billion in activity for mobile partners.
If Microsoft gets a 20 percent share of revenue from its MVNO partnerships, and a significant percentage of Microsoft’s 30 million customers sign up, paying $15 a month, the business could generate an incremental $1 billion annually.
A more realistic prospect is 20 percent take rates, which at $15 a month would represent six million customers. At $15 a month, that would generate something on the order of $216 million.
By itself, that will not move the revenue needle for Microsoft. But that might not be the point. Enhanced customer acquisition and retention are more likely the upside.
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