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    The Future of MVNOs

    Strategies to succeed with MVNOs

    in Latin America

    www.informatandm.com

    Your global research partner

  • 7/27/2019 The Future of MVNOs White Paper

    2/12 2012 Informa UK Ltd. All rights reserved. www.informatandm.com2

    Contents

    About the authors ........................................................................................................3

    Understanding the global picture ............................................................................4

    The outlook for MVNOs in Latin America .................................................................4

    Opportunity for MVNO-led pricing arbitration is low..................................................5

    Triple play will remain a major MVNO driver ........................................................... 6

    Beyond the telecoms MVNO: The retailer, the financial and the youth MVNO ...... 7

    The MVNO quadrant: Global and regional case studies ............................................. 8

    Global MVNO survey ................................................................................................... 10

    Informa UK Limited 2012. All rights reserved.The contents of this publication are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa UK Limited,our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this publication are the trade marks, service marks or tradingnames of their respective owners, including Informa UK Limited. This publication may not be:-

    (a) copied or reproduced; or(b) lent, resold, hired out or otherwise circulated in any way or form without the prior permission of Informa UK Limited.

    Whilst reasonable efforts have been made to ensure that the information and content of this publication was correct as at the date of first publication, neither Informa UK Limited norany person engaged or employed by Informa UK Limited accepts any liability for any errors, omissions or other inaccuracies.Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of suchinformation and content.Any views and/or opinions expressed in this publication by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/oropinions of Informa UK Limited.

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    Daniele Tricarico

    Senior Analyst

    Daniele Tricarico is a senior analyst covering Latin

    America at Informa Telecoms & Media. He examinesoperator strategies with a focus on operator performance,

    mobile networks and service strategies, including VAS

    and MVNOs. He regularly writes in-depth analysis

    and reports, and contributes to bespoke research and

    consulting projects in the region. Daniele has also

    developed a series of international conferences on

    telecoms networks and infrastructure, such as the IMS2.0

    World Forum, the SDP Global Summit and the Femtocells

    Forum.

    Prior to joining Informa, Daniele worked as a socialmedia analyst for consulting firm Interaction London.

    Fluent in English, Spanish and Italian, Daniele holds an

    MA from the University of Bologna and an MSc in new

    media and information systems from the London School

    of Economics.

    Follow Daniele on Twitter @dtricarico

    Dario Talmesio

    Principal Analyst

    Dario Talmesio, a principal analyst with Informa Telecoms

    & Media, leads the Mobile Europe team, focusing on marketdevelopments and competitive dynamics of the European

    markets. He advises European mobile operators in key

    areas of their business including competitive issues, market

    and marketing positioning, MVNO and retail strategies, new

    business models, and FMC and FMS strategies.

    Dario began his analyst career at the Economist Groups

    Economist Intelligence Unit, where he focused on the energy

    and telecoms markets in Western European countries.

    Before joining Informa, he worked for the Yankee Group as

    an EMEA mobile consumer analyst based in London.

    Dario holds a degree in Business and Economics from the

    Universita Cattolica of Milan and an MA in Applied Social

    and Market Research from the University of Westminster

    in London.

    Follow Dario on Twitter @dariotalmesio

    About the authors

    Working with Informa

    Informa Telecoms & Medias strategic insights, key market data and forecasts have led the market for more than 25 years. We

    have 65 analysts in nine research offices offering pragmatic and actionable advice to the leading global players in the telecoms

    and media sector. Our clients represent all parts of the value chain, from telecoms operators to pay-TV providers, from content

    providers to device manufacturers. Our syndicated research and comprehensive databases provide vital data and analysis

    focusing on the global telecoms and media markets, and are widely used and valued by industry professionals and thought

    leaders. We also provide a range of consultancy and bespoke research services, including white papers, webinars, strategy

    sessions and executive presentations.

    For more details on Informa Telecoms & Media and how we can help your company identify future trends and

    opportunities, please contact Marco Esposito, [email protected] or +44 (0) 7884 400 999.

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    Understanding theglobal picture

    A new phase of MVNO expansion is beginning

    MVNO markets have gone through various stages

    of development in recent years. Since the first

    introduction of MVNOs in the 1990s and the second

    wave of proliferation in the mid-2000s, the number of

    players has increased and contracted in cycles. The

    attitude of mobile operators has gone through some

    radical changes: Initially, the mobile operators fought

    against MVNO legislation and the MVNOs themselves;

    then they accepted the existence of MVNO players; and

    then they started eagerly seeking new MVNO partnersand developing aggressive wholesale strategies.

    Informa believes that a rejuvenated phase of expansion

    is beginning. In markets where MVNOs have traditionally

    played a role, typically Europe, Asia Pacific and

    North America, MVNO players are consolidating and

    internationalizing but, despite this, they are continuing

    to grow in many segments.

    There are still many market segments untapped by the

    mobile network operators that are being addressed byMVNOs these include the ethnic markets, data-only

    connectivity, and community-led and retailer-owned

    MVNOs and there is also a strong push from mobile

    operators wanting to increase their share of mobile

    wholesale revenues. Informa believes that virtually every

    mobile market has the potential to benefit from MVNOs,

    and every mobile operator can derive an advantage from

    MVNOs.

    The global MVNO market will reach 186 million

    subscriptions by the end of 2015. Although North

    America and Western Europe will still account for the

    vast majority (see fig. 1), new markets are developing

    Latin America, Africa, Middle East and Asia are all

    experiencing great MVNO interest.

    When their offering is appropriately designed, MVNOs

    can be a win-win-win market: host operators can reach

    additional actual or potential customers in a way that is

    more efficient compared with what their own retail networks

    can do; wholesale partners can enrich their existing

    nontelecoms services with mobile connectivity, or extend

    their brands into the telecoms sector; and customers can

    benefit from a more accurately-segmented offering.

    However, the reality is that, in the vast majority of mobilemarkets, MVNOs do not exist at all, while in some markets,

    MVNO activity is still in an embryonic phase. In developed

    MVNO markets, the MVNOs can account for approximately

    15-20% of the customer base, a level that is generally

    considered physiologically sustainable.

    The outlook for MVNOsin Latin America

    The market is still embryonic, but there is

    significant potential for growth

    Typically, Latin American MVNOs have been the domain of

    existing telecoms companies keen to offer converged fixed/

    mobile bundles. The most notable examples include the

    ISP Maxcom and the cable player Megacable in Mexico,

    ISPs UNE and ETB in Colombia, and Telsur/GTD in Chile.

    The first nontelecoms MVNOs appeared only in the

    second half of 2010. Initially, Colombian TV group

    RCN launched Uff, an MVNO offering cheap long-distance calls to fixed and mobile numbers in the main

    countries where the Colombian expats live. Then, in

    mid-2011, the region saw the first retailer launch,

    when Costa Rican electronics and furniture retailers

    Grupo Monge and Casa Blanca introduced Fullmovil.

    The mobile network operators (MNOs) have finally started

    to look with interest at the wholesale model and the

    initial figures are encouraging. For example, Uff in

    Colombia is already a sizable MVNO, with close to 250,000

    subscribers at the end of 2011 (see fig. 2).

    In Brazil, where formal MVNO regulation was passed

    in September 2010, the regulator Anatel granted MVNO

    Middle East2%

    Africa2%

    Eastern Europe14%

    Western Europe46%

    Asia Pacific12%

    Latin America3%

    North America21%

    Fig. 1: Global, number of MVNO launches, by region,

    1991-2010

    Source: Informa Telecoms & Media

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    licenses to the insurance company Porto Seguro and

    the VoIP provider Sermatel Comercio. Both companies

    have teamed up with second-placed operator TIM, which

    provides the network infrastructure, and Datora, amobile-virtual-network enabler (MVNE). More recently,

    Anatel granted the first pure MVNO license to the MVNE

    Sisteer. Besides TIM, other network operators are looking

    with interest at the MVNO model, for example, the market

    leader Vivo. In March, Vivo announced plans to have at

    least two MVNO partners by the end of 2012. In order

    to achieve its objective, the operator created a board

    for wholesale and MVNO operations and is currently

    analyzing proposals from around 30 potential partners.

    The Latin American MVNO market started picking up inthe second half of 2011, and the strongest activity was

    in Colombia and Chile. In February this year, Chilean

    regulator Subtel received 26 license applications from

    companies interested in launching MVNO operations. In

    April, Virgin Mobile Latin America (VMLA) inaugurated

    its first MVNO in the Andean country, targeting the

    youth and youthful segments with a simple portfolio of

    prepaid data packages and a small but attractive range

    of smartphones.

    So far, VMLA is the only international group with plans tolaunch MVNO operations across the region. In addition

    to Chile, it plans to launch in Brazil, Colombia, Mexico,

    Argentina, Peru, Uruguay and Bolivia. Interestingly,

    Colombia is likely to have eight MVNOs and three MNOs

    in operation by the end of 2012: In addition to the MVNOs

    already in operation, retailers Exito and Falabella, and

    fixed operator Emcali, have also started discussions to

    find an MNO partner.

    Opportunity for MVNO-ledpricing arbitration is low

    MVNOs must find ways to offer attractive data

    offers to the right niche and at the right price

    In traditional MVNO markets, such as Europe, North

    America and Asia, MVNOs have historically targeted

    the prepaid market with a low-cost proposition and

    then tried to attract the more affluent customers.

    International experience shows that the wholesale

    business can bring MNOs significantly higher EBITDA

    margins than retail, by reducing subscriber-acquisition

    cost (SAC) while only slightly lowering ARPU. Typically,

    a market with comparatively high or very high pricesis more likely to have room for MVNO-led price

    arbitration. Markets with higher levels of churn also

    might offer better opportunities for MVNOs because

    users are more inclined to switch providers (see fig. 3).

    Given their pricing environments and churn trends,

    Brazil, Mexico and Colombia, and to a lesser extent

    Argentina, would appear well-suited for additional

    price competition. In all the markets, the lack of

    regulation in mobile termination rates (MTRs) and the

    fact that operators have mostly been left to negotiate

    MTRs among themselves have resulted in the higher

    cost of off-net calls. Brazilian rates are also affected

    by high telecoms-services taxation and, as a result,

    the country has the highest SMS prices in the region.

    Promotional activity, primarily the offering of cheapon-net calls, is strong across the region, contributing

    to sustained high levels of multiple-SIM ownership

    and churn.

    Subscriptions(000s)

    0

    50

    100

    150

    200

    250

    TelecsaUNE EPMMaxcomUff

    4Q11

    3Q11

    2Q11

    1Q11

    4Q10

    Fig. 2: Latin America, selected MVNOs' subscriptions,

    4Q10-4Q11

    Source: Informa Telecoms & Media

    Churn(%)

    Argentina Brazil Colombia Mexico

    France UK US

    1.5

    2.0

    2.5

    3.0

    3.5

    4.0

    3Q11

    2Q11

    1Q11

    4Q10

    3Q10

    Fig. 3: Selected countries, blended churn, 3Q10-3Q11

    Source: Informa Telecoms & Media

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    Informa, however, believes that for Latin American

    MNOs the option of teaming up with low-cost MVNOs

    to bring price competition to other MNOs is not

    particularly attractive. In the prepaid-dominated LatinAmerican markets, the potential negative impact of

    low-cost MVNOs on an already flat or declining ARPU

    is a major concern for MNOs. Latin American MNOs

    will be more interested in teaming up with MVNOs

    that, although helping improve EBITDA margins, can

    also bring additional revenues from unaddressed

    niches willing to use incremental airtime and data

    services (see fig. 4).

    Informa also believes that pricing will be crucial to the

    success of the higher-value data MVNOs. In addition

    to the well-known benefits of the MVNO model,

    higher-value data-focused MVNOs can help provide

    incremental revenues to offset declining ARPU

    levels. Finding the correct pricing levels and models,

    however, is a tough task. As in the case of Virgin

    Mobile in Latin America, data MVNOs will be eager

    to add smartphones to their data plans, but withoutsubsidies it can be challenging to meet customer

    demand for the devices at the right price.

    At the same time, MVNOs must be able to negotiate

    good wholesale rates from MNOs for the data they then

    sell at retail. In the retail market, MNOs are moving

    away from flat rates and toward models where they

    charge by actual data consumption, by time or by access

    to selected apps. MNOs themselves are still struggling

    to find efficient ways to price data services in the retail

    market. When it comes time to negotiate wholesaledata prices, MVNOs face the risk of remaining stuck

    with unfavorable conditions, which could ultimately

    jeopardize their business model.

    Triple play will remain amajor MVNO driver

    Challenging fixed-line operators and ISPs

    should exploit the MVNO model to develop more

    competitive offerings

    Most of the early Latin American MVNOs have been driven

    by the opportunity to offer fixed/mobile bundles, especially

    in the most concentrated markets, such as Mexico and

    Colombia (see fig. 5). It is not a coincidence that despite

    the absence of a full regulatory framework, both Movistar

    in Mexico and Tigo in Colombia have taken advantage of

    existing rules allowing telecoms services to be resold to

    build MVNO partnerships with ISPs and cable players. Toerode shares of strong competitors in their respective

    markets, Movistar and Tigo have established MVNOs

    with fixed operators looking to add value to their bundles

    of voice, TV and Internet service by including mobility.

    Movistar was the first to pursue this strategy, when it

    teamed up with Maxcom at the start of 2008. Similarly, Tigo

    in Colombia has partnered with ISPs UNE EPM and ETB to

    offer mobile broadband services to contract customers.

    For the foreseeable future, Informa expects alternative

    ISPs, especially in the most unbalanced fixed-linemarkets, to retain a strong interest in the MVNO

    model with the aim of increasing customer loyalty

    Margin(%)

    0

    10

    20

    30

    40

    50

    AT&T

    (US)

    Vodafone

    (UK)

    Orange

    (France)

    Telcel

    (Mexico)

    TIM

    (Brazil)

    Claro

    (Brazil)

    Movistar

    (Argentina)

    Fig. 4: Selected operators, EBITDA margin, 3Q11

    Source: Informa Telecoms & Media

    Marketshare(%)

    America Movil Telefonica Millicom Telecom Italia

    Telecom Personal Oi Others*

    Concentration: Herfindahl index

    0.25 0.32 0.51 0.54

    0

    10

    20

    30

    40

    5060

    70

    80

    90

    100

    MexicoColombiaArgentinaBrazil

    Fig. 5: Brazil, Argentina, Colombia, Mexico, market

    share and concentration, 3Q11

    Notes: The Herfindahl index is defined by the sum of the squares of themarket shares of all firms in the market, where the market shares areexpressed as fractions. An index below 0.01 indicates a highly competitivemarket. An index below 0.15 indicates an unconcentrated market. An

    index between 0.15 and 0.25 indicates moderate concentrat ion. An indexabove 0.25 indicates high concentration. *Nextel, CTBC and Sercomtel InBrazil; Iusacell and Nextel in Mexico; and Nextel in Argentina. TelecomItalia owns 22.9% of Telecom Personal in Argentina.

    Source: Informa Telecoms & Media

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    and reinforcing their offering by bundling products.

    With their knowledge of and expertise in the telecoms

    business, fixed-line players and ISPs remain the most

    likely candidates to buy into the MVNO model at theearly stages of its development.

    It is no coincidence that the first cable operator to

    launch an MVNO was Megacable in Mexico and that the

    challenger fixed-line operator Axtel is also said to be

    close to launching an MVNO there. The opportunity is

    comparatively weaker in countries where the broadband

    market is more competitive, such as Brazil, and the main

    existing mobile operators can develop converged offers

    through partnering with their own fixed-line counterparts.

    In markets like Brazil, it is the nontelecoms companiesthat are expected to be major players in the MVNO

    business, starting with retailers and financial institutions.

    Beyond the telecomsMVNO: The retailer, thefinancial and the youth MVNO

    Retailers can help MNOs increase loyalty andreduce churn, but negotiations with MNOs will

    be tough

    Beyond the telecoms MVNO (e.g., an existing fixed-line

    telecoms player with an MVNO operation), retailers and

    financial institutions have been and remain among the

    strongest candidates to become MVNOs in Latin America

    (see fig. 6). Large and mass-market retailers are

    already key players in the value chain, since they take

    the largest slice of handset sales, especially for prepaid

    users. The combination of a strong brand and a larger

    and far-reaching retail network are the key benefits

    retailer MVNOs could offer MNOs.

    Despite the clear benefits that retailers could bring to

    MNOs, only a handful of international retailers, such as

    supermarket chains Tesco in the UK and Aldi in Germany,

    have launched MVNOs. Retailers are typically focused on

    volumes, have low EBITDA margins and are used to having

    strong negotiating and bargaining power with suppliers,

    factors that can prove to be especially challenging in

    their negotiations with MNOs. Furthermore, retailers will

    naturally target the mass market, which for MNOs raises

    the risk of market-share cannibalization, especially in theprepaid-dominated Latin American markets.

    Even so, the retailer model does have potential in the

    region, starting in the geographically larger countries,

    such as Brazil, Mexico and Argentina, where it is more

    challenging for MNOs to develop far-reaching retail

    networks. In addition, retailers can help MNOs increase

    loyalty and reduce churn by using their customer-loyalty

    experience to offer discount and loyalty cards and to

    offer leasing programs for device purchases. As the

    VAS market develops, the retail MVNO is also in a goodposition to develop mobile commerce.

    The m-commerce and m-banking opportunity, alongside

    the retail network, is at the core of the potential value

    proposition of the financial MVNO. The opportunity

    for this type of MVNO varies across Latin America,

    depending on the level of maturity of each market. There

    is certainly scope in the region for prospective ethnic

    MVNOs, targeting communities of migrants and nationals

    with family or friends living abroad to provide financial

    services. Given the reach and needs of the Latin Americandiaspora in Europe and North America, the long-distance

    market offers a good opportunity to add mobile-money

    value-added services (VAS), such as international credit

    transfers, to voice services.

    Overall, banking penetration remains on average lower

    than mobile penetration, and telecoms and financial

    regulators are starting to develop rules for the provision

    of mobile-money VAS to those both with and without bank

    accounts. A number of providers of financial services

    have already launched m-banking platforms and couldbe interested in the MVNO model. Since smartphone

    penetration remains about 10% regionally, the MVNO

    opportunity is initially expected to be limited mainly to

    GVT, Lebara, Virgin Mobile

    Banco do Brasil, Banco Real

    Santander, Itau, HSBC

    Carrefour, Casas Bahia,

    Pao de Acucar, Walmart

    Sao Paulo FC, Santos FC,

    S.E. Palmeiras, Gremio FBPA,

    Corinthians, CR Vasco de Gama

    Correios, Ipiranga, Globo

    Telecoms

    Financial

    Retail

    Sports

    Others

    Fig. 6: Brazil, companies interested in launching an MVNO

    Sources: Sisteer, Datora, Informa Telecoms & Media

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    offering voice and basic SMS-enabled financial services

    for low-end and feature phones, but as smartphone

    prices decline, more sophisticated services will appear.

    The financial MVNO, however, faces the same

    challenges as the retailer MVNO in terms of negotiations

    with MNOs, given its natural focus on the mass market.

    In addition, operators are increasingly eager to play

    a role in the m-commerce and m-banking markets.

    The way regulation develops in this area will largely

    determine the development of this MVNO model.

    Regardless of market-structure barriers to MVNOs, given

    the current demographic trends, Informa believes that

    those MVNOs targeting the youth segment have a largeraddressable market in Latin America than in Europe and

    North America (see fig. 7). Nonetheless, the size of the

    addressable market for youth MVNOs will depend on the

    income levels and local competitive dynamics in each

    country. In the case of Virgin Mobile Latin America, for

    example, the flexibility of pricing models will determine the

    real size of the youth segment addressable in countries

    as different as Chile and Bolivia, especially when MVNOs

    plan to offer unsubsidized devices. The strength of the

    opportunity for the youth MVNO will also vary depending on

    other factors, such as changing regulation. For example,

    with Brazil planning to cut taxes for tablets manufactured inthe country, there might be an opportunity for data-focused

    MVNOs targeting the devices to the youth segment.

    The MVNO quadrant: Global and regional case studies

    The viability of MVNOs depends on local market conditions and on the will and ability of operators to reach out to niches

    of customers with highly relevant services. Informa presents a selection of mini case studies of international and regional

    companies that have succeeded with the MVNO model.

    Under

    -15population(%)

    0

    5

    10

    15

    20

    25

    30

    35

    EasternEurope

    SouthernEurope

    NorthernEurope

    EasternEurope

    NorthAmerica

    SouthAmerica

    CentralAmerica

    Caribbean

    Fig. 7: Global, estimates of under-15 population

    percentage, end-2010

    Source: UN

    The incumbent MNO

    Orange, France ICE, Costa Rica

    Orange, part of the France Telecom Group, supports

    several MVNOs in France, its home market, including:

    Virgin Mobile, which recently incorporated two

    quad-play offerings and is regarded as one

    of the most thriving full MVNOs globally. Its

    subscriptions totaled more than 2 million at

    the end of 2011.

    The M6 MVNO of Metropole Television,

    the third most-watched TV network in the

    country.

    NRJ Mobile, a 90/10 joint venture between

    banking corporation Credit Mutuel-CIC and

    multimedia group NRJ. Like Virgin Mobile,NRJ targets the youth segment. It had 900,000

    subscribers at the end of 2011.

    Before the mobile market was liberalized in late 2011,

    state-owned ICE launched two MVNOs to preemptmoves by new competitors Claro and Movistar. ICE

    partners with well-established Costa Rican companies

    to reinforce its role and image as a key asset for the

    country. ICEs network currently supports two MVNOs,

    both with 45,000 subscribers as of April 2011:

    Fullmovil is owned by Grupo Virtualis, a

    consortium formed by consumer electronics,

    household appliance and furniture retailers

    Grupo Monge and Casa Blanca.

    Tuyo Movil is owned by national TV station

    Teletica. The first MVNO to launch in CostaRica, it has achieved positive results in both

    quality and customer experience.

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    The MVNO

    Poste Mobile, Italy Uff, Colombia

    Poste Mobile, the MVNO of national postal service

    Poste Italiane, is the most significant player in the

    Italian MVNO market, with various voice and data

    offers, mobile phone deals and a large distribution

    network. It offers a host of VAS, primarily m-banking

    and m-payment, such as airtime remittances, couponclick-to-buy and m-insurance. Poste Mobile recently

    launched the Zero Pensieri Infinito service plan, which

    includes unlimited voice calls and SMS messages to all

    national destinations plus 1GB of data for a monthly fee

    of 34 (US$44). Poste Mobile is also a rare example of

    an MVNO marketing services specifically to business

    customers. Hosted on the network of second-placed

    Vodafone, it has more than 2 million subscriptions.

    Uff was launched in late 2010 by TV network RCN

    Television, a unit of media conglomerate Ardila Lulle

    group. Uff has a no-frills business model based on

    offering cheap long-distance calls to the main countries

    where the Colombian diaspora lives. Hosted on Tigos

    network, Uff rapidly added 50,000 subscriptionsin its first two months, reaching a total of 250,000

    subscriptions by the end of 2011 and becoming the

    first sizable MVNO in Latin America. From launch, the

    MVNO has evolved its service proposition by adding two

    prepaid data plans and two BlackBerry plans. Through

    a strategic agreement with Nokia, it also offers the

    Pack Listo Uff plan, including a Nokia C3 device with

    unlimited data.

    The MVNE

    Teleena, Netherlands/UK Datora Telecom, Brazil

    Teleena is a mobile virtual network enabler (MVNE)

    based in the Netherlands and the UK that provides an

    array of services on a wholesale basis to MVNOs and

    corporate customers, including low-cost roaming and

    converged fixed/mobile applications. The company

    is focused on enabling MVNOs to differentiate

    themselves through offering VAS. Teleena owns and

    operates its own BSS/OSS and an all-IP mobile core

    network, which is connected to Vodafones radio

    access network in the Netherlands. In Europe, Teleenahas a partnership with Vodafone in the UK and the

    Netherlands, where it hosts over a dozen MVNOs.

    Datora was the first telecoms company to apply for an

    MVNO license from telecoms regulator Anatel in Brazil.

    This license enabled Datora to become the first MVNO

    aggregator (MVNA) in the country. The company has

    international expertise in both connecting operators

    using VoIP and infrastructure management. It is currently

    enabling the countrys second-placed MNO, TIM Brasil,

    and insurance company Porto Seguro to launch the first

    MVNO in Brazil. Datora has also signed an agreement

    with Virgin Mobile to launch operations in the country. Thecompany has a strong focus on the machine-to-machine

    (M2M) opportunity in Latin America.

    The challenger MNO

    E-Plus, Germany Movistar, Mexico

    German operator E-Plus has been owned by Dutchtelecommunications operator KPN since 2002. E-Plus

    network enables a range of affiliated MVNOs, including

    pan-European MVNO Simyo, which is also present

    in Belgium, France, the Netherlands and Spain, and

    supermarket retail MVNO Aldi Talk, both leading the

    no-frills prepaid German market. E-Plus also enables

    ethnic MVNO Ay Yildiz, targeted at the large Turkish

    expat community, as well as blau.de, MedionMobile,

    MyMTVMobile and Base. Its advanced and diversified

    MVNO strategy has been instrumental in allowing

    E-Plus to maintain its market share at just under 20%,making it the third-largest operator in Germany.

    Telefonica in Mexico was one of the Latin Americanpioneers in the MVNO space, hosting one of the first

    regional MVNOs, by fixed-line operator Maxcom, back

    in 2008. In recent quarters, Telefonica has consolidated

    its MVNO strategy. In July 2011, Megacable launched

    Megacel on Movistars network with the plan of targeting

    existing fixed-line clients by offering multiple SIMs to

    family households at preferential rates. At the end of

    2011, Movistar was announced as the MNO partner for

    Virgin Mobile in Mexico. As a challenger operator in a

    market where America Movil has a dominant presence,

    MVNO enablement has become an important strategictool for Movistar in an effort to gain market share.

  • 7/27/2019 The Future of MVNOs White Paper

    10/12 2012 Informa UK Ltd. All rights reserved. www.informatandm.com0

    Global MVNO survey

    Respondents: 145Respondent company types: MVNOs, MVNEs, MNO wholesalers, IT and telecoms vendors

    Date: March-April 2011

    Which MVNO types offer the biggest growth potential? (Choose two)

    "Ethnic and retail segments are still big, but new segments are emerging"

    What are the top business challenges for MVNOs? (Choose two)

    "The MVNO target market will remain price-sensitive; diversification might be needed"

    MVNOswillfocusmoreoncustomer-experiencemanagement.

    Dataconnectivitywillenablediversificationinproductsandservices.

    Butpricepressurewillremainchallenging.

    0

    5

    10

    15

    20

    25

    30

    35

    40

    Shareofrespondents(%)

    Enterprise

    Telecomsdiscount

    Device/machine-

    to-machine

    R

    etail/brandextender

    Socialnetworks

    Youth/mediaand

    entertainment

    Ethnic/international

    0

    10

    20

    30

    40

    50

    Shareofrespondents(%)

    Wholesale-contract

    terms

    Devicemanagement

    Billing

    andcash

    management

    Retaild

    istribution

    Customer

    segmentation

    Te

    chnology

    management

    Service

    dive

    rsification

    Priceco

    mpetition

  • 7/27/2019 The Future of MVNOs White Paper

    11/12 2012 Informa UK Ltd. All rights reserved. www.informatandm.com 11

    Which non-telecoms industries could benefit from MVNO services? (Choose two)

    "The MVNO business model will support vertical sectors core business"

    MediaandentertainmentcompaniescouldbenefitfromtheMVNObusinessmodel.

    Thefinancial-servicesindustryisemergingasasectorthatcouldbenefitfromMVNOs.

    Connected-devicefirmsandsocialnetworksarealsopotentialbeneficiaries.

    Which service features could improve MVNO offerings? (Choose two)

    "An explosion of data offerings is imminent"

    Threemaindevelopmentsareexpected,allcustomer-centric:

    Customer loyalty

    Data

    Financial services.

    0

    10

    20

    30

    40

    Shareof

    respondents(%)

    Loyaltyprograms

    Mobileadvertising

    Dynamicpricing

    SocialCRM/selfcare

    Cloud-basedapps(telephony,

    messaging,

    backup)

    Mobilebroadband

    Internationalroaming

    Financial(remittances,

    paymentandtransfers)

    0

    10

    20

    30

    40

    50

    60

    S

    hareofrespondents(%)

    Other

    Socialnetworks

    Financialservices

    Mediaand

    entertainment

    Automotive

    Consumer

    electronics

  • 7/27/2019 The Future of MVNOs White Paper

    12/12

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