The global mobile virtual network operator (MVNO) market size was valued at USD 52.83 billion in 2017 and is projected to expand at a CAGR of 7.6% from 2018 to 2025. Growing use of data and value-added services such as live streaming and mobile commerce-based services are expected to drive the market over the coming years. Increasing smartphone penetration across the globe and subsequent rise in mobile subscriber base are estimated to remarkably contribute to industry growth.
Mobile virtual network operators cater to various customer needs; however, they do not own the full infrastructure or license for using radio frequencies. The presence of a large number of market players has led to an increased competition among service providers. Consecutively, this has led the companies to offer mobile services at cheaper rates.
The emergence of groundbreaking services such as machine-to-machine (M2M) transaction and mobile money is expected to impel the market growth. Technological advancements, such as cloud, are projected to propel market demand over the next few years. MVNOs are expected to provide cheaper and convenient mobility options for industries such as lifestyle, entertainment, and productivity to increase revenue generation.
Factors such as increasing network speed and growing use of advanced devices have led to high growth in the use of data applications such as video streaming and internet browsing. Significant investments are being made to improve mobile broadband (MBB) connections and network coverage. All these factors are contributing toward market growth.
Benefits such as low-cost data and voice services offered by the model is also expected to lure more consumers, which, in turn, would accelerate market growth. Mobile network operators (MNOs) are making substantial investments in upgrading and maintaining their existing infrastructure. However, this has resulted in high operational costs and declining average revenue per user for MNO. The lack of operational expertise may also restrict market growth.
The MVNO market is expected to witness significant growth in the M2M segment due to increasing adoption of cellular connectivity in machines ranging from automobiles to vending machines. Technical advancements in the 3G M2M market, extension of mobile network coverage, and initiatives by MNOs to expand their service offerings are the key factors driving the M2M segment. There has been a significant increase in the number of MNOs collaborating with M2M application service providers, which is expected to fuel the demand for mobile network element deployment in M2M applications over the forecast period.
MNOs offer various service plans and products for different markets having fewer users, which leads to an expensive and inefficient operational and business support systems. The cost associated with retaining and acquiring new customers is relatively high, mainly for fixed term contracts. MVNOs can help in overcoming cost issues, optimizing resource allocation, and improving the quality of service (QoS), which would contribute to the market growth. Moreover, access to voice and data services at low costs is expected to be the key interest for customers.
In terms of revenue, the full MVNO segment led the market in 2017 and was valued at USD 32.61 billion. Emergence of MVNO is the result of regulatory interventions to lower the barriers for market entry and eventually increase competition and strategic decisions undertaken by MNOs. MNOs have their own mobile licenses, infrastructure, and customer relationships with their end-users and are capable of handling network routing. They generally have roaming deals with foreign counterparts.
However, in an attempt to expand their existing customer base and operations, MNOs are collaborating with MVNOs and target niche segments. To avoid direct competition with MNOs, MVNOs are focusing on offering differentiated services. They are aiming at capitalizing on opportunities related to roaming services by providing special services to tourists and youth. MVNOs aid in increasing revenue for MNOs by providing wholesale deals, increasing network utilization, and creating their MVNOs by launching sub-brands.
Increasing network speed and use of advanced devices enable growth of data applications such as internet browsing and video streaming. Increasing investments are made to improve network coverage and Mobile Broadband (MBB) connections. The MVNO model offers benefits such as time efficiency and cost-effectiveness, which is expected to lure more consumers, in turn, accelerating the market growth. Managing connected living, personal data, and rising e-commerce activities are also anticipated to provide significant growth opportunities for key players.
Intelligent networks connecting a wide range of devices enable increased productivity of enterprises. Partnerships between MNOs and MVNOs majorly depend on brand reputation, distribution network, marketing strategies, and access to market segments. The MVNO model is shifting from voice to a more data-centric experience. MVNOs across the globe are looking for data-capable smartphones as a way to expand their businesses.
The Asia Pacific and MEA regions are projected to experience a significant growth over the forecast period. Asia Pacific regional market was valued at USD 4.62 billion in 2017. due to rapid growth of the telecom services industry in this region. Moreover, emerging economies, such as India, Vietnam, Myanmar, and China, are putting efforts in expanding and modernizing their telecommunication services. Southeast Asian countries, such as Thailand, Singapore, and Philippines, are also estimated to contribute substantially to the region’s expansion over the forecast period.
Countries with advanced cellular networks, such as Japan, Malaysia, and Australia, are expected to play a major role in the expansion of the Asia Pacific regional market. For instance, in Japan, MVNOs offer services, such as remote management of vending machines, online gaming, M2M, and surveillance. They also provide voice-controlled services in security applications and patient monitoring in the healthcare industry. Europe and North America are projected to grow significantly over the forecast period due to favorable regulatory framework.
However, aggressive pricing strategies followed by MVNO have cannibalized growth opportunities in Europe, specifically in Spain and Austria. Countries, such as U.K., Germany, and Netherlands, are projected to have a positive impact on the region’s growth over the forecast period. Data services are expected to be the key services for regional expansion. Favorable regulatory policies and active MNO support are anticipated to drive the Latin America and MEA regional markets.
Some of the prominent market players are Lebara Mobile, Lyca Mobile, TalkMob, Giffgaff, Poste Mobile, Virgin Mobile, and Tracfone. Geographical expansion remains the focus of all companies operating in this market. For example, Virgin Mobile launched Virgin TV in August 2012, which enabled users to stream up to 90 live TV channels using mobile devices. The company is present in countries such as U.S., U.K., Australia, Poland, and Saudi Arabia.
It offers a broad range of services such as digital cable recorders, TV-on-demand, broadband, cable, television, and mobile and converged solutions. Apple, Inc. announced its plans to launch its MVNO service in U.S. and has tied up with many MNOs. Industry players in the market are adopting several other strategies such as M&A, partnerships, and collaborating with other firms to gain a competitive edge and deploy better services.
Base year for estimation
Actual estimates/Historical data
2014 - 2017
2018 - 2025
Revenue in USD Billion, Subscriber in Million, CAGR from 2018 to 2025
North America, Europe, Asia Pacific, Latin America, and MEA
U.S., Canada, U.K., Germany, Italy, France, Spain, Netherlands, Australia, Japan, Malaysia, Singapore, Hong Kong, Brazil, Mexico, and Colombia
Revenue forecast, subscriber forecast, company ranking, competitive landscape, growth factors, and trends
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This report forecasts revenue and subscriber growth at the global, regional, and country levels and provides an analysis of latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global mobile virtual network operator (MVNO) market report on the basis of type, operational model, end use, and region:
Type Outlook (Revenue, USD Billion, 2014 - 2025)
Operational Model Outlook (Revenue, USD Billion, 2014 - 2025)
Service Operator MVNO
End-use Outlook (Revenue, USD Billion, 2014 - 2025)
Regional Outlook (Volume, Million Subscribers; Revenue, USD Billion, 2014 - 2025)
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