MVNO Asia – maturing markets with emerging momentum

MVNOs’ Asia was a great success this year, with speakers commenting on the state of established markets as well as new opportunities as more and more countries authorise the launch of MVNOs. Competition will intensify and this brings strategic choices. What’s the right approach – to adapt an existing business or for those seeking to carve out a niche?

The MVNO business has become mainstream in many Asian countries, as we found at the recent MVNOs’ Asia event. In countries like Australia, Japan, Malaysia and South Korea, MVNOs are now well established – according to one speaker, there are 2.8 million subscribers to MVNO propositions in Australia alone (to put that into perspective, that’s more than 10% of the total mobile subscription base in a market in which penetration levels exceed 140% [1]of the population).

MVNOs have become a clear alternative to many of the established brands, helping them to boost their reach and to maximise return on their assets. Although some friction had been reported in the early days of the industry, it’s probably fair to say that most MNOs recognise that MVNOs can attract subscribers that they can’t and that competition stimulates the market.

At the same time, more and more countries are eager to permit the launch of MVNOs. India, China and Singapore are all actively pushing towards a more open market, while Nepal, Bangladesh, Philippines, Cambodia, Pakistan, Indonesia and Myanmar are expected to follow soon. In other words, MVNOs are booming in Asia and, while we can expect some failures, there’s a huge amount of energy in the business – which was reflected at the event.

Of course, success raises challenges. In markets in which MVNOs have become established, that success means that increased competition creates price pressure and a fierce battle for customer attention. In new markets, there’s the question of how the new entrants can be carve out their niche – after all, not all can build a proposition based on price or simplicity. Paradoxically, the solution to these challenges could be the same.

In fact, whether a market is established or emerging, differentiation will be a critical contributory factor to the success of MVNOs. Some will develop generic retail propositions but that’s a tough battle. The agile will recognise that their best chance of success is to build a uniquely differentiated offer that is targeted at a specific niche.

So, for example, ARPU pressure in Australia is forcing existing and would-be MVNOs to search for added value while, in India, MVNOs are expected to explore areas that have not been pursued by the MNOs. Differentiation is the key to both strategic choices. MVNOs need to find ways in which they can increase the value of what they offer and secure more income that they can retain as their own – after all, bundle prices are really only delivering margins, based on the wholesale prices they obtain from their hosts.

Delivering a specific service for which incremental fees can be secured can make a huge difference – and one market that is eager to embrace more value is the SME. While MNOs have eagerly targeted consumers and have tried to service the needs of large corporate users and MNCs, only some have stepped up to the challenge of targeting smaller businesses.

We know many that have – we’ve helped a good number of them – but MVNOs, who have to fight for every customer should recognise the opportunity. It’s possible to target SME users, cost-effectively and with highly targeted offers and tactics. And, it’s easy to give them a valuable service, ranging from more control over their personal and professional lives, all the way to group and team communications to help businesses grow.

So, the next generation of MVNOs in emerging markets will likely see more that launch with targeted business offers alongside retail solutions, and established players in proven markets may shift to address such niches. As every MVNO knows, it’s a fight for survival, but it’s best to pick a battle in which you have a greater chance of success.


MNOs, MVNOs, Service differentiation, Increasing ARPU, MVNOS Asia, ARPU

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