Customer segmentation strategies will dominate the MVNO sector as subscriptions reach 150 million by 2013

Subscriptions to mobile virtual network operator (MVNO) services will reach 150 million worldwide by 2013 with 42% coming from Western Europe, according to new research from Informa Telecoms & Media. This will represent 3% of the total global mobile subscriptions.

Despite its relatively modest share of the global mobile market, the MVNO sector remains robust, according to Paul Merry, senior analyst at Informa Telecoms & Media and author of a new report, Future MVNO Strategies: Customer Segmentation and Market Evolution. The sector has been buoyed by the development of sophisticated segmentation strategies developed by MVNOs as a mechanism to survive in highly competitive and penetrated markets, according to Merry. Indeed the variety of approaches taken by new entrant providers, which range from loss-leader approaches to using the MVNO model to deliver a full suite of customer telecommunication service options, creates numerous ways of evaluating and defining success beyond the number of subscriptions captured.

In the process of researching this topic Informa Telecoms and Media identified 13 unique motivators for the launch of virtual cellular services in addition to simple telecommunication service provisioning, and Merry asserts that this is “only the beginning with new motivators and approaches developing as virtual approaches are adapted to the challenges of converging telecommunications“.

Several sub-segments have developed with specific targeted strategies created to reach the particular audiences involved. As part of its analysis Informa Telecoms and Media identified nine major MVNO service approaches including discount, community, MNO emulating, premium VAS, FMC, advertising and loyalty, enterprise, LBS and telematics approaches.

Discount and community orientated approaches will dominate over the forecast period delivering approximately 55% of total global MVNO subscriptions by 2013. Part of the reason for this dominance is the fact that many discount MVNOs are pursuing multiple-SIM strategies. This is aimed at capturing market share quickly.

The challenging environment of advanced cellular markets has seen mobile operators closely following strategies developed by MVNOs to reach particular segments within customer communities. These ‘micro-segments’ have become viable targets for operators as mobile penetration has reached saturation while the wholesale model has begun to be accepted by MNOs as a means to reach the final remnants of audiences in their own highly penetrated markets. These factors combine to create a stable future for virtual operator approaches moving forward and provide a strong retort to industry doomsayers who have claimed the MVNO model has failed after highly publicised failures most notably seen in North America.

On the contrary, Merry argues, the market has entered a highly developed stage characterised by market stability and devoid of the hype seen in early stages of MVNO service development again most notably seen in the North American market.

For more information, please contact Paul Merry on +44 (0) 0207 017 5450 or at paul.merry@informa.com