American MVNO Market to Reach US$10.7 Billion by 2010

The Yankee Group has announced that the mobile virtual network operator (MVNO) market in the USA will reach US$10.7 billion in service revenue by 2010. Most of that revenue will be dominated by large Tier 1 MVNOs. Although the long-term viability for large MVNOs remains healthy because of their deep establishment in the industry, little room remains for new market entrants. Small MVNOs entering the market will be challenged by the fewer subscribers and the remaining revenue left to claim.

The boom in MVNO relationships is the means by which wireless operators can achieve a competitive edge by capitalizing on market differentiation and segmentation in the industry rather than competing on price.

By 2010, the MVNO market will be comprised of three subscriber tiers totaling 29 million customers. Several large MVNOs will make up the first-tier accounting for 24 million subscribers. The second tier will be comprised of medium MVNOs, accounting for 2.5 million subscribers. Finally, a dozen small MVNOs will make up the third market segment, accounting for 2.5 million subscribers.

"The growth of the MVNO market has great potential to influence the long-term viability of the wireless industry," said Marina Amoroso, Yankee Group research analyst in the Wireless/Mobile United States (WMUS) Decision Service. "However, even with the current boom, sustainability for medium and smaller MVNOs remains uncertain. Therefore, system integrators and mobile virtual network enablers (MVNEs) that provide infrastructure, BSS and operational support for these MVNOs will experience fewer risks if they anticipate business collapses and plan exit strategies."

Successful large MVNO players that currently dominate the market will continue to experience growth and fuel the industry by segmenting the host carriers' target subscriber base and distribution channels. Smaller MVNOs will benefit from their symbiotic relationships with MVNEs that provide BSS/OSS support, because this MVNE partnership enables small MVNOs to focus their attention on customer acquisition and retention, marketing and brand building."

Posted to the site on 10th May 2005