A new report by Telecoms research company BroadGroup Tariff Services has suggested that although the number of subscribers to mobile virtual network operators (MVNOs) will double between now and 2012 the overall business model needs to change.
BroadGroup Tariff Services said that with more than 300 MVNOs in 37 countries, the marketing strategy will have to change because the global market is becoming more fragmented. This climate favours a niche MVNO with a community-oriented approach.
The report also noted that non-telecoms organisations are beginning to use the MVNO tool as a way to increase brand awareness.
Later this year Tesco will be doing just this when it launches Tesco Mobile using O2 as a carrier.
IReach analyst Sinead Daly said that from Tesco’s point of view it is “an additional service to enhance their brand name”, adding: “I don’t know if there’s an Irish brand strong enough and big enough to take on the risk apart from Tesco.”
Contrary to worldwide growth predictions, iReach doesn’t foresee huge growth in the MVNO market in Ireland. However, Daly said that it wouldn’t be a big shock to anybody if operators like BT decided to go in this direction.
She said that acquiring an MVNO partner is a big undertaking considering that people think the mobile market could already be a bit saturated, with Ireland having over 100pc mobile phone penetration.
The advantage, however, of a telecoms company like Meteor or Vodafone pairing with an MVNO, she said, is that they could gain customers they wouldn’t usually gain.
With 02 positioned midway in the market, a company such as Tesco is a good partner, but seeing as how Meteor target a younger consumer base it is predicted that should it let someone piggyback on its network it would have a similar public image.
By Marie Boran