One of the major factors pushing the market growth is the technical flexibility provided by MNOs. Although the telecom market in developed countries is maturing and the growth in the number of subscribers is expected to slow down, the ever-increasing demand for mobile internet is anticipated to provide growth opportunities to the market players, during the forecast period.
Insights on Market Segments
Based on type, the MVNO market has been categorized into discount, telecom, media/entertainment, business, retail, migrant, cellular M2M, and roaming. Among these, the discount category is estimated to be the largest revenue generator in 2018. During the forecast period, the market for roaming category is anticipated to record highest growth, as MVNOs continue to offer comprehensive roaming tariffs to encourage people to travel more frequently, which, in turn, is expected to generate greater demand for roaming offers.
On the basis of category, the market has been segmented into prepaid and postpaid MVNOs. The postpaid category is estimated to hold a market share of around 52% in the MVNO market in 2018. During the forecast period, the prepaid category is projected to register higher growth, on account of growing mobile penetration in developing countries of Asia-Pacific (APAC), Africa, and Latin America (LATAM), where prepaid schemes are more preferred over postpaid schemes, which carry fixed monthly rentals, irrespective of the usage.
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APAC is set to become the largest MVNO market by 2021, globally. Established players have started expanding their footprints in the APAC region. Besides, local MNVOs are planning to expand the scale of their operations by adopting commercial models, tailor-made for the Asian market. A key factor hindering the market is the low average revenue per user (ARPU) in the region as compared to other markets, worldwide. Owing to this, relatively smaller MVNOs struggle to generate profitable business in the market.
Developing countries are proving to be huge potential markets for MVNOs. In 2014, China opened its telecom market for MVNOs. With a telecom subscriber base of more than one billion, China is offering ample growth opportunities to the new players in the market. Likewise, in India, the opening up of the Indian telecom market to MVNOs is also expected to offer growth opportunities to the players in the market.
Some of the major companies operating in the industry are AT&T Inc., Verizon Communications Inc., T-Mobile AG, CITIC Telecom International Holding Limited, Truphone Limited, Telefonica S.A., Virgin Mobile, Tracfone Wireless Inc., Lycamobile Group, Red Pocket, Inc., America Movil S.A.B. de C.V. and Sierra Wireless, Inc.