Omdia: The number of global MVNO users is expected to increase to nearly 392 million by the end of 2029

Zhitong Finance App learned that according to Omdia's latest forecast, the global MVNO (mobile virtual operator) market will grow steadily in the next few years, and the number of global MVNO users will increase from 317 million at the end of 2023 to nearly 392 million by the end of 2029.

Global MVNO users will grow more strongly than individual mobile users. Over the 2023-2029 period, the compound annual growth rate of MVNO users will reach 3.6%, more than double the compound annual growth rate (1.6%) of all individual mobile users over the same period.

However, the share of MVNOs in the overall mobile market is still very small. By the end of 2029, MVNO users will account for 4.2% of the total number of individual mobile users worldwide, but this is up from 3.8% at the end of 2023.

Growth trends will vary between regions and within the same region. Over the next five years, MVNO users in the Americas and the Middle East and Africa will grow strongly, while MVNO users in Asia and Oceania will grow moderately, and MVNO users in Europe will decline.

In the Americas, MVNO users will grow at a CAGR of 10.6% between 2023-2029, driven by growth in Brazil, Mexico, and the US.

In the Middle East and Africa, the compound annual growth rate of MVNO users will reach 17.6% between 2023-2029, driven by South Africa and Nigeria. However, by 2029, the Middle East and Africa will remain the smallest MVNO markets among major regions.

MVNO users in Asia and Oceania will grow slightly at a CAGR of 1.2% between 2023-2029, but Asia and Oceania will remain the largest MVNO market among the major regions of the world.

Due to competition among operator sub-brands and the decision of some MVNOs to deploy their own mobile networks and become mobile network operators (MNOs), the European MVNO market will shrink, with a CAGR of -2.2% in 2023-2029.

Banks, supermarkets, broadband and television operators are major players in the MVNO sector. This sounds more like a continuation than a change, but a new dimension has also emerged.

Notably, some internet banks (Neobanks) or digital financial service providers have recently launched MVNO services or other mobile services. Brazilian internet bank Nubank launched its MVNO business in October 2024; at the same time, in the UK, Revolut launched eSIM and mobile roaming services.

The UK's Tesco Mobile was launched in 2023 and is still the country's largest MVNO, with 5.51 million users as of the end of 2023. Meanwhile, Walmart Mexico's MVNO Bait has become Mexico's largest MVNO, with 13.75 million users in June 2024, just four years after launch. MVNO services fit well with supermarket businesses because supermarkets can utilize their existing customer base, retail infrastructure, loyalty programs, and value brands.

American Cable operators have found that MVNO services complement their broadband and television products, and Cable operators' MVNO business has become the main driving force for the growth of the US MVNO market.

Some new MVNOs combine artificial intelligence (AI), cryptocurrency, and decentralized networking concepts. But at this stage, it's unclear if these relatively exotic features and models are appealing enough to make these providers significant players in the MVNO market.

Another trend that goes against the growing trend in the MVNO sector is that some MVNOs have decided to deploy their own mobile networks, which they believe will give them more autonomy and flexibility, as well as more growth and success. Rakuten Mobile Japan is a leader in this field. Most providers that have adopted this strategy are still in the process of transitioning from MVNO to MNO.

suggestions

Look realistically at the growth prospects of MVNOs. In the next few years, global MVNO users are expected to grow faster than individual mobile users, which bodes well for the overall development of the MVNO industry. However, this growing trend is not widespread. The American region and the Middle East and Africa will show good growth, particularly Brazil, South Africa, and the US, while the European MVNO market will shrink. Banks, supermarkets, and fixed line telecom operators have established a foothold in the MVNO sector, and they will continue to be the main players rather than new concepts and entrants. The industry should adjust its plans to focus on the areas with the most growth prospects.

Integrate MVNO products into a broader service portfolio to maximize impact. Many of the top performing MVNOs are combined with a wider range of service offerings. Walmart Mexico has achieved rapid growth by bundling MVNOs with the ecosystem of stores, e-commerce, financial services, and healthcare services. Tesco Mobile is integrated with Tesco's Clubcard loyalty program. The MVNO launched by the US Cable operator complements its fixed line services, and the move turned them into integrated operators. If mobile services are integrated into complementary service portfolios and complemented by sales and marketing strategies, the prospects for MVNO's success will be brighter.

Assess new technology and find new opportunities. Although the MVNO industry is currently showing more of a kind of continuity than change, new technology will bring disruptive power. Telecom as a service providers, such as Gigs, are simplifying the launch and management of their own mobile services for enterprises. With eSIM, it's also more feasible for new players to provide MVNO-like mobile services. MVNOs should pay attention to these developments, assess how they will transform the MVNO industry, and identify and address the opportunities and threats posed by them.