More signs of future MVNO growth

At the Prepaid Press Expo this year, one panel I moderated focused on MVNOs in America over the next five years. With so many high profile MVNOs disappearing over the past three years — either through bankruptcy or acquisition from a larger carrier — you might think that MVNOs on the whole aren’t a great idea. Recent developments suggest this might not be the case. MVNOs can work, as evidenced by most of Europe, but it has to be under the right circumstances. As these circumstances present themselves in American and other nations with a low level of MVNO usage, we could see an increase in worldwide MVNO patronage.

A recent TeleGeography post pits MVNO usage and Western Europe and North America against the rest of the world. They might have done even better to separate Western Europe and North America, because the use in the former is more widespread than in the latter. This would change the chart, allowing for an uptick in North American MVNO usage without a proportionate increase in Western Europe.

MVNO patronage in the U.S. isn’t particularly high, and it’s about to fall further with Sprint’s acquisition of Virgin Mobile. Yet MVNO usage could be on the rise in the next few years, or so says Paris Holt of TelSpace. This is because, as Alex Besen said last year, the US wireless penetration rate isn’t quite at 100 percent yet. Once it hits that we should see MVNOs become more prevalent. Maybe not the kinds that we saw mid-decade, but probably ones that focus on a particular niche.

What does this mean for world MVNO growth? From the TeleGeography article:

‘As markets approach maturity and as regulatory regimes look to increase competition and to better serve diverse populations, MVNOs will be allowed to launch services in many new countries,’ said TeleGeography senior research analyst David Leach.

If the number of MVNO users increases like Holt thinks it will in the US and it increases in other countries like TeleGeography thinks, we could see a real growth in MVNO usage worldwide.

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