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* MVNOs are already having a significant impact on customer numbers, churn and ARPU in developed mobile markets as they grow in number and influence

* The capabilities of 3G networks are now poised to further expand the diversity of MVNOs

* All mobile operators have something to gain from hosting 3G MVNOs and may vie for the best MVNOs, leading to changes in host operator allegiances

* Hosting MVNOs could be the only viable strategy for 3G new entrants

CAMBRIDGE, UK, 7 June 2005 – 3G will stimulate a new wave of MVNOs that offer services beyond discount voice calls and SMS and increase benefits for host mobile operators, according to a new report, The Future of MVNOs in the 3G Era, published by Analysys, the global advisers on telecoms, IT and media (

With the number of Mobile Virtual Network Operators (MVNOs) growing rapidly in developed markets, MVNOs are already having a significant impact on customer numbers, churn and ARPU in a number of markets. MVNOs are organisations that offer distinct end-to-end mobile services using the network capabilities of an existing mobile operator, but do not own a radio network or spectrum license.

“With over 100 MVNOs launched in Western Europe and over 25 present or due for launch in the USA, mobile operators cannot ignore the impact MVNOs are having”, says Dr Mark Heath, co-author of the report, “MVNOs have acquired nearly a quarter of all mobile users in Denmark. In the UK, Virgin Mobile has propelled T-Mobile from last to first place in terms of market share by customer numbers, while in the USA, Sprint PCS hosts more than 15 MVNOs.”

The report shows that the service capability, capacity and cost limitations of 2/2.5G networks have constrained the competitive focus of today’s MVNOs within price competition and limited non-voice offerings. 3G is now poised to fuel the number and diversity of MVNOs, allowing a range of organisations to deliver content and services from their core businesses, including multimedia data services and downloads. “A new wave of MVNOs are already leading the way”, says Alastair Brydon, report co-author, “Universal Music, TV channel M6 and radio station NRJ all plan to set up MVNOs in France. Sports content provider ESPN, owned by Disney, plans an MVNO in the USA while a number of data-only MVNOs have emerged with services for mobile devices.”

The report shows that all mobile operators have something to gain from hosting 3G MVNOs. “Although only a relatively small number of mobile operators have taken MVNOs to date – as some perceive MVNOs in their discount form to be a major threat – the service capabilities of 3G strengthen the case for mobile operators to embrace MVNOs”, says Brydon.

The report shows that the growth in 3G MVNOs may cause changes in host operator allegiances, as mobile operators vie for the right MVNO partners. “Hosting MVNOs could be the only viable strategy for 3G new entrants to achieve profitability quickly and avoid unsustainable levels of subscriber acquisition costs”, comments Brydon, “in addition, mobile operators may find themselves battling not just for the loyalty of their own customers, but for MVNOs that have millions of customers.”

The Future of MVNOs in the 3G era reviews the lessons learned from MVNO activity in Western Europe and North America to date, with case studies in Denmark, France, the UK and the USA. It considers how the arrival of 3G will change the MVNO environment in these markets, giving examples of emerging 3G MVNOs. The report assess the strategic options for different types of mobile operators (including 3G new entrants) to take advantage of MVNOs in the 3G era and indicates promising routes to market for prospective 3G MVNO entrants. The report provides a set of actions for established mobile operators, 3G new entrants, existing and prospective MVNOs and industry regulators.

The report is available to order from priced at GBP1700 plus VAT. For more information, telephone Analysys Research on +44 (0)1223 460600 or email

About Analysys (

Analysys provides strategy and management consultancy, information services and start-up support throughout the telecommunications, IT and media sector. Its grasp of market dynamics, coupled with creativity, rigour and renowned objectivity, enables Analysys to consistently exceed the high levels of quality and innovation that its clients expect. The company has over 130 staff in offices in Cambridge, London, Edinburgh, Madrid, Milan, Paris and Washington DC, and works with associates in Auckland, Melbourne and Vancouver.

Recent reports include:

* The Telco Product Portfolio beyond 2010 (May 2005)
* The Telco Organisational Structure beyond 2010 (April 2005)
* The Western European Mobile Market: trends and forecasts 2005–2010 (April 2005)
* Product and Service Opportunities from Short-range Wireless Technologies (March 2005)
* The Western European Mobile Market: trends and forecasts 2005–2010 (March 2005)
* The Telco Organisational Structure beyond 2010 (March 2005)
* Wireless over VoIP: technical and commercial prospects (February 2005)
* Billing for Mobility: strategies for convergent charging (February 2005)
* The World’s Top Ten Wireless Services (January 2005)
* Retaining Customers and Minimising Churn: strategies for mobile markets (December 2004)
* The Business Case for Carrier Migration to VoIP (December 2004)
* Pushing Beyond the Limits of 3G with HSDPA and Other Enhancements (December 2004)
* The Role and Impact of WiMAX and Proprietary BWA (November 2004)
* Making a Success of the Mobile Content Value Chain (November 2004)
* Viable Business Models Point to Big Opportunities for Public WLAN (October 2004)
* Emerging Business Models in Voice: the impact of Skype and other private VoIP applications (September 2004)
* TV and Video Services on a Mobile Phone: the killer application for 3G? (September 2004)
* Delivering High-speed Mobile Internet/Intranet Services: the role for 3G and public WLAN (August 2004)
* The Business Case for Broadband Entertainment (July 2004)
* Western European Fixed Telecoms Markets: forecasts 2004–2009 (July 2004)
* Spectrum Trading and Liberalisation: new threats and opportunities for telecoms business models (June 2004)
* 3G Launch Strategies: critical decisions on services and technology (June 2004)
* The Road to Fixed–Mobile Substitution Starts with 3G (April 2004)
* VoIP in the US Market: services, business models and regulation (March 2004)

Media contact (for author photography, executive summaries and interviews)

Louise Nunn
Tel: +44 (0)1223 460600

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