Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article Helen Gaden of the MVNOs events series talks us through some of the finding of a recent survey they conducted into the European MVNO market.
The European MVNO market is the oldest, most established MVNO market in the world, and that brings with it its fair share of challenges. Mobile phone subscriptions are close to saturation point, with an estimated 467m unique mobile subscribers across the continent at the end of 2018, of which 111m are expected to belong to MVNOs (just under quarter of the market share), woes of a crowded market and higher penetration slowing growth have echoed across the continent.
Given the limited opportunities for increasing unique subscriber number, intense competition on price and modest patterns of revenue growth, it may seem counterintuitive that Europe is still viewed as the key region for driving global MVNO growth. And yet, a recent survey carried out by the MVNOs Series would seem to refute any such notion. Indeed, calling upon industry leaders across the globe, the survey asked participants which region they viewed as the most promising for growth. And the result? The majority cited Europe as the one market with the greatest potential: 40% to be exact. This constitutes the highest figure for any region.
Yes, competition in Europe’s mobile industry remains intense. But this is also viewed worldwide as making the region a hotbed of market innovation, a trait that is seen as playing into the hands of virtual operators – specialists in delivering niche, disruptive services in rapid response to shifting market demands.
Take Germany, Europe’s largest domestic MVNO sector and one of the most significant in the world. Their market enjoys a total of 135 active independent and carrier-owned MVNOs, which accounts for 19.5% of German mobile subscriptions. Similarly, in the UK a total of 77 active MVNOs enjoy a 16% share of the country’s mobile market. Germany and the UK are joined by France, Spain, Denmark and the Netherlands in accounting for the majority of the MVNOs operating within the European Union.
Some of the biggest virtual operators command market shares which compare favourably with the entire MVNO sectors of other countries, with Tesco securing 6% of the market, Virgin Mobile 4% and Sky Mobile, Talk Talk and iD Mobile each with 1% respectively.
Outside the EU, by some distance the most developed virtual network market is found in Russia. Russian MVNOs currently have a 5% market share with 37 active players, although this number is increasing faster than anywhere across Europe. A main factor in the rapid rise in the number of Russian MVNOs is the proactive approach taken by carrier Tele2, which in December 2017 launched its own MVNE focused on the Russian market. The company reported that its revenues from MVNO services tripled in 2018, with a total of 1.7 million subscribers signed up to providers using its network. It is forecast that, at present rates of growth, MVNOs could account for up to 15% of Russian mobile subscribers by 2022.
Another factor that allows for promising growth in Europe is the fragmentation of the European mobile market (i.e. a high number of individual domestic markets for the size of population, plus the prevalence of large, diverse urban communities) because it makes it difficult for large carriers to cater to everyone’s needs.
To add to that, the results of the survey revealed that both regulations and emerging technologies are seen as another key growth driver in Europe. New technologies causing seismic shifts in the MVNO space include IoT, eSIM and 5G, the latter of which is one of the hottest topics of conversation across the mobile industry in 2019.