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Push or pull, one way or the other MVNOs make it onto MNOs’ infrastructure. By being in the position of being able to see both The MVNO Directory and The MNO Directory, it is pretty clear that where MNOs compete against each other MVNOs find their way into the market.
It doesn’t always happen this way, but the norm is for 3 MNOs to compete over a territory. Each has paid for a network and their license and needs to make as much use of their network capacity as possible to achieve a return on their investment. Usually 1 MNO has a well established hold upon the market having either been the first to launch or being the incumbent operator with advantages. We can chart a theoretical 60% of the market to them. The next to launch has eaten heavily into their monopoly and picked up 35% of the market and then the enthusiastic 3rd to launch only manages to pick up 5% of the market.
Having gone to market and built out a nationwide network that 5% market share leaves the 3rd place operator with massive spare capacity and a negative balance sheet. They then receive an approach from a 3rd party asking for 10% of their spare capacity in exchange for money as they too would like to be an operator. Seeing as the MNO does not have 95% of the market, whoever the proposed MVNO targets is more than likely to be a competitors’ subscriber. Having failed to win this business themselves they now have a chance of winning it via a 3rd party; they will not receive 100% of the revenue but their outlay in terms of the new business costs falls on the MVNO to bear.
So it depends on your market position if you are the MNO. If you are the dominant player then you need to be very strategic; your partnerships will primarily be with MVNOs targeting markets you have written off already as marginal at best. You also have to give serious thought to indirectly losing market share to your own MVNO rather than the MVNO of a competitor, better to lose something than everything. When your competitor launches 20 pay as you go low cost MVNOs your customer base will CHURN, so you have to act. In Europe many fake MVNOs launched as brands of MNOs to deal with this. In these instances the MNO kept all the business but has the cost of a new brand to maintain and still took an ARPU hit.
If you are the 3rd place operator you have a lot to gain if you can attract serious MVNOs with big brand names to your network. They will bring brand exposure that you can leverage. This was the case for One2One in the UK when Virgin Mobile launched. Virgin brought a massive youth market to the network and a whole new market segment, being the youth market, previously targeted as part of the mass market. Yes they did ultimately fall out about the benefit to T-Mobile (what One2One became), but crucially the last place MNO received an influx of business thanks to the use of the Virgin branding.
And the middle placed MNO? Tricky, the struggling MNO is after your business but you yourself are after the bigger MNO’s business. The more you fuel the MVNO market the more you expose your subscriber base to churn by your competitors retaliating. But by standing back and not being first up you leave yourself open to losing subscribers and not winning any fresh subscribers.
This means that the answer to what the MVNO market holds for you depends on which MNO you are, whether you can tolerate losing ARPU in exchange for maintaining at least an indirect client relationship and the type of enterprise you can attract to become MVNOs on your network, as opposed to your competitors. There is no market where once MVNOs have entered the market their presence has then being wiped out. So taking a negative stand towards MVNOs is negative (that sounds obvious but it is what MNOs have done, and lost out by doing so).
But unless your market is already at 200% penetration and it is impossible to increase ARPU by any method of entrepreneurial behaviour, then there is a profit to be had. Until every person with money or the ability to make you money has a SIM card and uses every service you can possibly push over your network then the market is not saturated.