MVNO - The new deal

SUMMARY

At a time when we are witnessing the launch, or announced launch of a growing number of MVNOs, this report seeks to establish the true scope of this phenomenon: will it forge itself a lasting position in the highly competitive telecom services' landscape, or will it remain confined to a basic service offering?

Starting with a look at the state of MVNOs' development in the most mature markets and sectors (media, retail), the report then explores the various strategies in place and identifies the chief selling points based on an analysis of the offers and their pricing, marketing and distribution schemes.

Also included in the report is a look at the players who are driving the mobile services market's growth: how MNOs are responding to this new trend, the stance being taken by integrated operators and what motivates companies - from a wide array of backgrounds (financial institutions, public utilities, automotive manufactures, airlines...) - to become MVNOs.

And, finally, IDATE has established several growth scenarios that will help further understanding of what is really at stake, and what the future holds for all of the players involved in the mobile services market: regulatory changes, and how competition and the changing shape of the service offering are impacting the sector's organisation.

MVNO in brief

• MVNOs' rise in the mobile industry
• Value chain and business models
• Existing and potential MVNOs' strategies
• How MNOs are responding
• Growth scenarios

Key questions

• What strategies are open to an MVNO?
• Under what conditions can an MVNO be profitable?
• What market share for MVNOs?
• What impact are MVNOs having on the mobile market in general?
• How are MNOs responding?
• What position are the other players taking: fixed telcos, ISPs, WISPs, internet and media companies...?
• What leverage thanks to regulation?
• What are the most likely growth scenarios?

Countries

• Belgium
• Denmark
• Canada
• France
• Germany
• Italy
• Spain
• UK
• USA

Players

• 7-eleven
• Amp'd mobile
• Boost Mobile
• Breizh mobile
• Debitel
• Disney mobile
• Easy Mobile
• Ello mobile
• Extreme Mobile
• Futur Telecom
• Gaymobile
• Helio
• Jitterbug
• M6 Mobile
• Mobile ESPN
• Movida
• OnStar
• Primus
• Qwest
• Saunalahti Group
• Tele2
• Telmore
• Tesco Mobile
• Transatel
• Virgin Mobile
• Wyless

Who should read this report?

Current and potential MVNOs

• Assessing the market's long-term outlook and profit potential
• The most viable strategies
• Identifying winning strategies

Mobile telcos

• Assessing the threat posed by MVNOs
• Fine-tuning response strategies

Fixed and integrated telcos

• Is this a market worth entering?
• How to take advantage of the MVNO phenomenon?

Equipment manufacturers

• Understanding the impact on the market
• Supplier or partner?

Investors and analysts

• Growth outlook, niche segment or mass market?
• Understanding the value chain and the business models

TABLE OF CONTENTS

1 - MVNO: definition and business models

1.1 Background

1.2 Operation and value chain

• MVNO: a mobile operator with no frequency spectrum
• MVNE: MVNOs' technical service provider
• MVNOs' positioning in the mobile value chain

1.3 The three different types of MVNO

• The central question of how to choose between computer infrastructures and telecom networks

1.3 The business model

2 - MVNOs' development in the mobile industry

2.1 Current state of mobile

• Concentration in the different mobile markets (Western Europe, North America, Asia)
• Niche opportunities not addressed
• Opportunities for value-added services
  • 3G
  • Media/entertainment companies' and equipment manufacturers' involvement in the market
  • Converging services
• The state of regulation
• Regulatory leverage
  • mobile number portability
  • contract life spans
  • simlock
  • handset subsidies

2.2 Weight and scope of the MVNO phenomenon

• Framework data, by continent (North America, Western Europe, Asia)
• Measuring the MVNO phenomenon
  • State of competition
  • Number of vendors per continent
• MVNO/ESP and SP market share - Subscriber numbers
• ARPU (Average Revenue Per User)
  • Case studies: Germany, Denmark, the UK
• Retail pricing
  • Case studies: Belgium, Denmark, France

2.3 Framework data by country

• France
• Germany
• Italy
• Spain
• The UK
• USA

3 - MVNOs' strategy

3.1 Financial strategy and key indicators

• Turnover
• EBITDA margin
• CAPEX; tangible and intangible investments

3.2 Growth strategies

• Pan-European development: negotiating power and economies of scale
• Regional development: tailored to target

3.3 Strategy of the offer

• Low-cost MVNO: distinction through pricing in a mass market
• Niche MVNO: distinction through value-added services
  • community aspect: ethnicity, sport, age, social network...
  • business
  • corporate
• Handset subsidies
• Opening up access: driving an upheaval of media's business model?

3.4 Pricing strategies

• Low-cost MVNO: it's all about the price
• Niche MVNO: bulls eyes

3.5 Marketing strategies

• Brand's role in marketing campaigns
• Budget

3.6 Distribution strategies

4 - Potential MVNOs' strategies

4.1 Telcos

4.2 Fixed telcos

4.3 ISP - WISP

4.4 Internet companies

4.5 Other players

• Media and entertainment groups
• Retailers/retail chains
• Financial institutions
• Other: public utilities, car-makers, airlines...

5 - MNOs' strategies

5.1 MNOs' responses to the rise of MVNO/ESP/SP

• "Multibranding"
• "Acquiring expertise"
• "Wholesale"
• "Fixed-mobile convergence"

5.2 Impact on MNOs

• Paid strategy
• Structural shifts

6 - Growth scenarios

6.1 General framework

• Threats and opportunities/incentives and challenges

6.2 Situation by geographical zone

• North America, Western Europe, Asia

6.3 Scenarios

• Scenario 1: Consolidation and development through basic services
• Scenario 2: Shift towards data MVNO
• Scenario 3: Limited growth or confined to pockets

For each of the three scenarios:

• Regulation
• Organisation and competition
• Services and content
• ARPU