PALO ALTO, Calif.-A strong push by mobile virtual network operators during the next several years backed by an emphasis on wireless data services and customized service offerings could boost the segment’s total revenues from $2.48 billion in 2004 to $9.35 billion by 2011, according to research firm Frost & Sullivan.
“The wireless data offerings from the MVNO, customized and specifically targeting a market segment, enhance the value proposition of the service providers’ business model, thus augmenting top-line and bottom-line results,” wrote Frost & Sullivan research analyst Samir Sakpal.
Sakpal noted that MVNOs are likely to see the greatest benefits by targeting their core brand demographics, entering the market early and partnering with host carriers that can provide robust platforms to offer both voice and data services.
“Partnering with [mobile network operators] and carriers at this stage, gives the ability to serve the market, which has not been catered to by the carrier or network operator and also eliminates the risk of cannibalizing the carrier’s market or entering into strong head-on competition with experienced wireless service providers,” Sakpal explained.
MVNOs also need to realize their market potential and measure their ability to enter into new markets outside their traditional core segments if they want to maximize revenues.
“In order to succeed in the wireless arena and effectively utilize its brand value, it is crucial for an MVNO to estimate the market size and know its customers as it enters the wireless arena,” the Frost & Sullivan report stated. “Targeted advertising and marketing campaigns, combined with tactical market segmentation based on prior experiences with customers, will prove highly profitable.”
A recent report from the Yankee Group predicts MVNOs will serve 29 million customers and post $10.7 billion in revenues by 2010. The report added that the MVNO market will be able to support up to six large MVNOs with more than 1 million subscribers each; five medium MVNOs with around 500,000 subscribers each; and up to 25 small MVNOs serving around 100,000 subscribers each.
