MVNOs are most commonly found in consumer driven economies. Western Europe and North America possess the vast majority of active MVNOs and a healthy spread of MVNOs can also be found in certain Asia Pacific countries (typically those with democratic governments and a positive association with Western markets).

There are several factors which normally induce the launch of MVNOs, these are:A consumer driven market.The existence of multiple MNOs within one country.Saturation and maturity of a mobile market.A regulator keen on promoting competition and lower prices.1 or more MNOs to have a minority market share compared to their competitors.Spare capacity for more mobile traffic over an MNOs network.

An MVNO can not exist without the agreement of an MNO. Regulators have tried forcing MNOs to open their networks up to MVNOs but this usually leads to legal complications and an unhealthy relationship between the two parties. This is detrimental to the MVNO and can ultimately cause its failure. Launching any business requires a financial outlay and even a virtual business can cost $USD millions to launch. Without a willing network the launch of an MVNO generally does not take place.

Once a mobile market reaches saturation point or an MNO finds itself lagging behind the competition the policy towards MVNOs on its network becomes interesting. The MNO at this point has paid for its license(s) and its physical network and requires revenue. The MVNO provides a low cost way of getting revenue and with the right contractual agreements should see it take business off the MNO’s competitors and provide it with an indirect revenue flow, while not cannibalising its own subscriber base.

Therefore the likelihood of an MVNO existing in a country with just 1 MNO is unlikely. In developing markets their existence is also unlikely due to a lack of network capacity and a drive by the MNOs to capture all the market for themselves first. Once these situations change the attitude towards MVNOs improves.

The driving force for the MVNO is the opportunity to generate an additional income from their existing client base. For most it is a diversification from their core business in the belief that their branding is strong enough to attract their existing clients to become their mobile customers too. For the regulator the introduction of MVNOs assists with ensuring niche groups are also targeted for communication services and the prevention of dominant players inflating their prices to uncompetitive levels.

To get the best insight into where MVNOs operate, what their parent companies do and which MNOs they partner we suggest purchasing a copy of The MVNO Directory. The directory is a global database of almost all known MVNOs with profiling information which assists our readers in understanding who operates in this market.

Why do MVNOs exist?