Undifferentiated, voice-only MVNOs will find it difficult to maintain critical mass and profitability in the face of defensive action from incumbent operators. Only those with a strong retail brand and an existing customer base will survive.
There is an emerging market for mobile entertainment MVNOs, but the network operators will need to review the terms of their relationship with these players, viewing them as allies in the value chain, rather than as competitors.
In the mobile data world, companies that have a strong entertainment brand will be essential partners for both on-portal content and also for MVNO operations in niche segments that the MNOs themselves are unable to reach.
Although turmoil lies ahead, Juniper Research predicts that revenues to MVNOs will increase from $15.4bn in 2006 to $67.4bn by 2012, and consumer subscribers to MVNOs will rise from around 93m globally to 352m by 2012. The new consumers will continue to be hungry for low-cost voice services ($42bn by 2012) but also increasingly for mobile entertainment, such as music and games.
Report author, Sue Uglow, commented: "Just because companies own content does not mean that they should automatically become MVNOs. Mobile-enabling content is a difficult, specialised and costly business and is outside the reach of most aspiring MVNOs. Yet MNOs need that content to make the mobile data business model work. There needs to be a radical review of the revenue-sharing arrangements for mobile content in order for the MVNO market to flourish in future."
Posted to the site on 8th February 2007
Posted to: www.cellular-news.com/story/21873.php