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No-frills MVNOs to steal market share

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No-frills mobile operators such as easyMobile could snatch up to 20 per cent of Europe's market share over the next five years, according to crystal ball gazers at Strategy Analytics.

They reckon these low-cost MVNOs (mobile virtual network operators) could really "shake up the stagnant European prepaid market" by offering competitive no-frills services.

Some six in ten mobile users in Europe opt for prepaid or pay-as-you-go (PAYG) services and analysts reckon that this group could be swayed with cheap calls, according to its report EasyMobile: Trends in Low-Cost Service Provision in Europe.

A fortnight ago, for example, E-Plus - the number three player in Germany's mobile market and a subsidiary of KPN - unveiled its no-frills outfit Simyo. And boffin reckons that more and more operators will launch their own discount services in the face of increased competition.

Said Sara Harris, a senior analyst at Strategy Analytics: "Even though prepaid was the engine that accelerated mobile growth in Europe the majority of prepaid offers today are not only expensive, but they ignore customer demands for drastically lower-cost pricing.

"Thus, low-cost MVNOs have been able to storm into the market appropriating customers for whom price is king."

A price war in the UK has been sparked following the launch of easyMobile - the latest business from no-frills entrepreneur Stelios Haji-Ioannou.

In April easyMobile's boss Frank Rasmussen said that UK punters are treated badly compared with other mobile users in Europe and that operators have had things "very cosy".

"This battle has only just begun," he said, "and I can guarantee it's going to be both long and costly for the existing British players. The impact of easyMobile's entry into the market will be profound and with customers as the big winners." ®

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