By some estimates, the global mobile virtual network operator business will grow at rates close to eight percent per year through 2028, close to the growth rate seen over the past few years.
But there is one important caveat: most observers consider third party MVNOs not owned by the major mobile operators, as well as alternate brands owned by mobile operators, to be “MVNOs.”
To be sure, “true” MVNOs are growing, but nowhere near as fast as it might seem.
Some of us use a different definition, considering a firm to be an MVNO only when it is not owned directly by an underlying mobile operator, using its own assets to create a different brand. It that view, “ownership” matters more than “business model.”
Subsidiary brands directly and fully owned by a mobile operator are simply ways of increasing direct market share while maintaining brand image. In this view, such brands are not MVNOs. Also, some consider “resellers” of mobile brands to be “MVNOs.” Some of us do not put resellers into the MVNO category.
To be sure, true MVNOs are gaining subscribers globally, in part because more people are becoming mobile users. As 10 percent of mobile subscriptions are supplied by “true MVNOs,” the number of subscriptions naturally grows as total subscriptions grow.
Contributing to such growth are policies in some nations favoring wholesale mechanisms helpful for MVNOs. MVNOs also are not lawful in a majority of countries, so we could see growth if rules are changed.
Generally speaking, MVNOs are lawful in countries that are saturated, with virtually 100-percent use of mobility services. If that pattern holds, we should eventually see moves to legalize MVNO operation as more countries reach mobile saturation.
By some estimates, as much as 47 percent of all MVNO subscriptions are provided by a mobile operator that fully owns the account.
GSMA Intelligence, for example, tracks eight separate categories of MVNOs, namely discount, telecom, media/entertainment, migrant, retail, business, roaming and M2M variants.
"Discount" and "telecom" categories (provided by an MVNO that forms part of a range of telecom services such as fixed phone and broadband) are the most prominent types of operation, accounting for 47 percent of the global MVNO market.
About 18 percent of MVNO market share is held by companies from adjacent industries (retailers, banks, TV or media organisations).
About 35 percent of the market is held by specialized providers (third parties) focused on segments such as business, migrant, M2M and roamers.
The point is that about half the “MVNO” market belongs not to independent third parties but is directly owned by the underlying telecom and mobile companies. Over time, a greater share is likely to be taken by the underlying mobile operators as they consolidate smaller brands in their markets, or make acquisitions of independent firms outside their core markets.
So “true” MVNOs will keep growing, if more countries allow them to operate; as more markets become saturated (and governments use MVNOs to increase competition); and if mobile operators fail to acquire the larger independent operations to gain market share.
But it is a complicated analytical matter. The market appears to be bigger if one lumps all mobile brands--irrespective of ownership--into one “MVNO” market. It is much smaller if one subtracts the market share actually held by connectivity and mobile incumbents.
In some markets telecom incumbents themselves are the firms gaining the most market share (fixed network telcos or connectivity providers). In some markets the leading mobile operators are acquiring the biggest third party providers.
The point is that “true” MVNOs are not growing as fast as it often seems, and in some markets, connectivity providers are acquiring the greatest portion of market share themselves, though often using subsidiary brand names.
In a few markets the “true” MVNOs” might be losing share.
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