MVNOs and their Extinction!
As of 2008, MVNO subscribers account for at least 3% of the world’s mobile subscriber base. They have only been reasonably successful in a few countries around the world, gaining between 8-10% market shares in those markets. And things start to go south from there for MVNOs!
These are not very encouraging numbers to justify any bright future for this breed of operators. Early 2000, all MVNOs were under impression that “content is King”; so we (ESPN, Disney, etc) can rule and legacy mobile operators are just “dumb pipe” providers which are going to extinct without our help. Every time they were questioned about their business plan viability, MVNOs were throwing Virgin Mobile’s name as a success story in UK.
Well, let me tell you a story. Once upon a time (around 1995) UK government released spectrum for two new mobile operators in 1800 MHz band. One of the new operators was a company from Hong Kong called Hutchison Whampoa with tons of money. They created a flashy brand called Orange, spent tons of money to promote it and rest is history. The other operator was a company called Mercury Communications (who?!). They tried to be creative and crate a brand name called Mercury one-to-one, with a boring logo and advertisement. Our poor one-to-one were not going anywhere until a charming prince showed up and said let me help you with my brand name. His name was Richard Branson and his company was Virgin! Virgin was a household name and helped one-to-one to utilize its network by using its massive marketing machine and its brand name power. It was nothing to do with content! It was all about brand recognition. These days mobile operators are in a better position than lots of conetnet guys in terms of brand name!!! I guess people did not really analyze this unique partnership and tried to build a new business out of that. Lets read some history next time before defining a new business!