Bright future for Europe's MVNOs

Wanna play piggyback?

The future looks bright for mobile virtual network operators in Europe, with subscriber numbers in for a boom.

That's according to the latest report from IDC - "Opportunities for MVNOs in Western Europe". The research firm expects subscribers to MVNO services to sharply increase over the next few years, jumping from 13 million in 2005 to more than 47 million in 2009.

MVNOs, such as Virgin in the UK, piggyback on another operator's physical network to offer mobile telephony services. The MVNOs buy network time from the operator at wholesale rates and re-sell it to their customers.

"Generally, one thing we see from history is that any new player coming into the market will shake things up," Paolo Pescatore, EMEA research manager, Consumer European Wireless and Mobile Communication with IDC, told ElectricNews.Net.

He says the entrance of MVNOs into the market will see the newcomers offering low prices and attractive offers to customers, prompting the existing networks to do likewise.

IDC identifies a number of opportunities for potential MVNOs, including low-cost roaming through a pan-European offering, and convergence. The advent of 3G has also left the way open for MVNOs to compete in the data market too.

"There will be many opportunities for companies, not only those currently operating in wireless, or telecoms for that matter, but for those in other industries," said Pescatore. "Opportunities are not only limited to players seeking to offer mobile services to consumers and/or corporate clients, but are also available to those enabling MVNOs."

Last year, the Irish communications regulator ComReg ruled that Vodafone and O2 dominated the Irish mobile market, resulting in little competition within the market. The regulator proposed that MVNOs enter the market to boost competition.

© ENN

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