While Tele2 has launched its own mobile network, it still relies to a certain extent on its MVNO agreement to serve customers, so it is included in Telecompaper’s VO figures for Q3 2015. With the next Virtual Operators Market report in Q1 2016, Tele2 will be excluded, as it is expected to have completed its nationwide network roll-out by then.
The ‘no-frills’ segment, offering basic services at relatively low prices, remains the largest segment in the VO market, accounting for more than 40 percent of customers. It grew by 3 percent compared to Q1 2015. All of the players in this segment, except Telfort and Simyo, managed to increase their customer numbers in the latest period, with Simpel and Youfone gaining the most. The next largest segment, taking about a third of the total VO market, remains the ethnic/international players, with Lebara taking the lead. The fixed operators, the third-largest segment, are also expanding in the mobile market, mainly due to growth at Tele2 and Ziggo.
Telecompaper’s latest 2015-Q3 report on Dutch VOs show that the total number of active virtual brands increased to 87 at the end of September 2015. Compared to Q1 2015, the total includes eight new entrants and three exits, while we also added two previously unknown players, which have been active a while. The market remains quite crowded, and several, particularly business providers continue to launch new initiatives, including mobile services as an add-on to their existing services. The number of launches as a standalone mobile-only solution was limited to one, the family-focused MVNO OpenMobile in May 2015. Other entrants included business fixed fibre player Fieber and six other business service providers.
Telecompaper expects more new entrants in the VO market, but also several exits, particularly amongst the independent MVNOs that only offer basic mobile services and depend on mobile as their main source of income. They will need to differentiate themselves better, as offering just a ‘me-too’ service is not a sustainable strategy, according to the researchers. The intense competition in the telecom market and changing interests among consumers are also driving MVNOs to launch value-added and OTT services, in order to limit churn and boost revenues, as recently seen at Lebara.
Much of the success of MVNOs depends on their wholesale agreement for network access. With Tele2 becoming the fourth mobile network operator, Telecompaper expects new opportunities to emerge for VOs. Tele2 is expected to actively seek wholesale customers on its network, as it works to raise capacity utilisation and recoup some of its network investment and operating costs. This may present a new chance for virtual players looking to gain access to 4G data services.