Mobile virtual network operators (MVNOs) – ranging from telecommunication service providers, media companies and supermarkets to banks, retailers and community groups who have entered the market without owning a network – have become increasingly relevant players in the mobile communications market in Europe. Two main elements have allowed MVNOs to be successful in the highly competitive and saturated European mobile market: their unique ability to effectively address the specific needs of different social groups and their capacity to offer aggressive price strategies.
New analysis from Frost & Sullivan (mobile.frost.com) Mobile Virtual Network Operators in the European Mobile Market, finds that there are very successful MVNOs with subscriber numbers ranging from a few thousands to millions. In Europe, at the end of 2006, the typical number of subscribers of an MVNO could vary from 5,000 to 5,000,000
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"MVNOs are not the Cinderella of the European mobile market," notes Frost & Sullivan Research Analyst Saverio Romeo. "They are able to aggressively compete with the main mobile network operators and are effectively addressing the mobility needs of specific social groups that big mobile operators find difficult to reach."
At the end of second quarter of 2007, there were 355 MVNOs in operation or ready to start functioning in Europe. This number will increase over the next three years. The market presence of MVNOs has grown particularly in Northern European markets where the phenomenon started between the late ‘90s and 2000. MVNOs are at an early stage in Southern and Eastern European markets. However, their numbers are growing sharply and many other organisations are ready to enter the market.
Ultimately, the success of MVNOs will depend on their ability to offer low prices, high-quality customer management and address the needs of specific social groups. Accomplishing these three elements, while challenging, is also critical to their being able to compete in the highly dynamic European market.
"Aggressive price strategies have helped MVNOs to attain significant market shares even as more vertical strategies, such as targeting ethnic communities, have allowed some MVNOs to move smoothly and successfully into niche markets," comments Romeo. "For MVNOs, identifying the right market segment is a key for being successful in the highly competitive mobile market."
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