Global News

MVNOs to gain access to European networks

THE NETHERLANDS - Despite an initial distrust of the MVNO model by mobile operators, a study by Tarifica reveals that an increasing number of European mobile network operators are considering allowing MVNOs access to their networks. The study, Mobile Wholesale in Europe, examines the role wholesale plays in the European mobile market.

Tarifica interviewed twelve operators during the course of the study and discovered that of these, five already sell airtime to an MVNO and of the remaining seven, six are contemplating doing so. Nicola Ainsworth, director of the mobile practice at Tarifica said, this change of attitude is, largely, due to a snowball effect. She said, "In well established markets, once one operator makes the decision to host an MVNO, other operators tend to act, so as not to lose competitive advantage". After all, if MVNOs are going to enter the market, it is preferable to have them on your network and at least gain some revenue.

Ms Ainsworth argues that the market is already becoming more open to the idea of the MVNO model and too much regulation is likely to result in protracted legal disputes. This would have the opposite effect of holding back market development, while concerned parties awaited the outcome of a dispute.

The changing attitude to MVNOs is only one part of the bigger mobile wholesale picture. Many are now following concerted strategies in this area hoping this will increase revenues and dispose of excess network capacity. SMS wholesale is one area where all operators are active, though indicators have shown that on an average this generates less than 1 percent of overall company revenue.

All operators agree that wholesale will play an increasingly important part in the mobile value chain, certainly with the introduction of GPRS and 3G services. According to Dutchtone, wholesale is now an essential part of mobile operators' business and Netherlands-based BEN foresees that its wholesale business will account for up to 40 percent of overall revenue within the next five years.