Research Notes

Mobile operators need to wake up – now!

As Strand Consult has pointed out for years, some mobile operators still have an old-fashioned attitude towards running a mobile company. These players feel in large part that they need to have their hands on the entire process – producing, delivering and selling mobile products and services to the end user. 
As described in our new report, How to Succeed in the Second-Generation MVNO Market, this has a lot to do with the way things have developed historically.
In the report, we identify four phases of the MVNO market, all of which have had decisive impact on the mobile market as whole.

· Phase 1 – a market where MNOs do not offer wholesale mobile telephony
· Phase 2 – a market where at least one MNO offers wholesale mobile telephony
· Phase 3 – a market where multiple MNOs offer wholesale mobile telephony
· Phase 4 – a market where multiple MNOs offer both wholesale mobile telephony and develop their own sub-brands.
In most mobile markets, these market phases follow each other in a natural chronological order. This means they can usefully be used as a measure of how mature an individual mobile market is. The sooner a market reaches a particular MNO market phase, the more mature it may be considered to be.
A market’s maturity will usually be linked to the level of fragmentation. A market with only one, or a few, dominating players will suggest a relatively immature mobile market, while one characterised by competition between multiple larger and smaller providers indicates a more mature market.
Since a mobile market’s maturity will in many cases follow this natural chronological order (phases 1-4), it makes sense for MNOs in less mature markets to prepare themselves for the next phase in that particular market.
Many western European countries are currently in phase 3 – where several MNOs have implemented wholesale strategies. This is largely a consequence of regulatory conditions in those countries, which encourage accessibility to mobile operators’ networks. Eastern European countries tend to be in MNO Phase 2, but moving rapidly towards phase 3 as more operators implement wholesale strategies to expand their businesses.
At Strand Consult, we are convinced that all of these markets are moving ultimately towards MNO phase 4 – where all mobile operator will establish themselves as Mobile Network Enablers and actively use MVNOs as a vital segmentation tool.
Mobile operators that fail to understand this trend– and to exploit the opportunity that it represents – could find themselves left behind as rivals make use of virtual operators to turn the market around to their own competitive advantage.

How to get success in the second Generation MVNO Market

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