Could we be seeing the end of MVNOs?
Probably not, though we’ll probably see a reduction in the number that exist. At least that’s how Julie Ask, research director and and senior analyst for Jupiter Research. While MVNOs traditionally target niche audiences not catered to by the big providers, the realistic size of those audiences isn’t large enough to induce competition. Even if one market consists of four million people, how many of them are realistic targets? Subtracting out those already under contract — or under family plans — reveals many fewer in the market, and then you have to factor in competitors.
Takeaway quote:
Some of the MVNOs targeting younger children (like Kajeet) may fare better as they are looking to sign up new subscribers rather than to lure them from existing plans. Parents are footing the bill for these younger children, but are not necessarily ready to have their youngest children on the family plan. They seek the control and options offered by new entrants such as Disney Mobile and Kajeet.
If Kajeet and Disney play their cards right, they can corner this market. Really, it makes sense: what better audience to capture than those who don’t already have the service? Getting people to switch is difficult — by nature people resist change, and beyond that, you have the issue of prior commitments. With the younger audience, you’re bringing in fresh customers. We like their business models.
Loading ...