Market Size of MVNOs

The number of MVNOs globally increased 61% between 2010 and 2018

The amount, and subscribers of mobile virtual network operators (MVNO) services has increased at a considerable pace over the past years. The number of MVNOs globally increased 61% between 2010 and 2018, representing an average annual growth rate of 6%

In 2018 there were 1,300 active MVNOs operating in 79 countries, representing more than 220 million mobile connections - or approximately 2.46% of the total 8.9 billion mobile connections in the world.

The rate of progress seems to continue. Orbis Research estimated that the value of the global MVNO market was $54 billion in 2017, and is expected to reach a value of $84 billion dollars in 2022, which implies a compound annual growth rate (CAGR) of 9.27% during this period.In line with increased mobile penetration and less organic growth in developed markets, the top eight MVNO countries, USA, Germany, Japan, UK, Australia, Spain, France and Denmark, makes up more than half of the 1,300 active MVNOs worldwide.

Map: Top 8 MVNO countries - Click on the + on the countries for more information

Table 1: Top 10 MVNO countries as of 2018

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The presence of MVNOs in developing countries has doubled in recent years. In 2010 MVNOs operated in 13 countries, while for the first half of 2018 they operated in more than 30 developing countries.

However, MVNO presence in developing countries still remains limited; with just one MVNO per five active MVNOs in developed countries. On average developing countries have 20 MVNOs compared to 74 MVNOs in developed countries.

MVNO in developing countries vs. developed countries

Seven MVNOs (in 53 countries): Tracfone, Virgin Mobile, Lycamobile, Snail Mobile, Lebara, Poste Italy and Tesco Mobile - makes up 80.5 million or more than 1/3 of the total 220 million MVNO connections worldwide.

As example the US MVNO Tracfone with its 22 million subscribers has a 65% share of the US MVNO market while in the UK, Tesco Mobile has 32%

Table 2: The largest MVNOs in the world

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The mobile penetration in the US is 147 lines per 100 inhabitants. With 133 MVNOs and more than 23 million connections, it is home to an extremely active MVNO market with 7 out of 100 subscribers having their mobile phone service with a MVNO.

In the UK, MVNO customers represent 15.93% of the total mobile market in 2018, with 15.3 million connections; that is, 23 of every 100 subscriber having their mobile phone service with an MVNO.

The mobile penetration in Spain was 125 per 100 inhabitants. The amount of MVNOs was 56 with a total of 7.3 million connections equaling as share of 11.69% of the total mobile market.

However, in mature markets such as those in Western Europe, MVNOs are disappearing because they have surpassed their MVNO role and have either consolidated, made network acquisitions, or been acquired by traditional operators who seeks to increase their market share.

The intense activity of mergers and acquisitions in the region is reflected in closures, mergers, acquisitions and launches of MVNOs every year and has led to an overall decrease in the market share of MVNOs in recent years.

The European MVNO market (EU) saw its market share lead drop from 45% in 2015, to stand at 36%. The US witnessed a similar reduction over the same period from 16% to 10%. Latin America (LATAM), Middle East (ME) and Africa (AF) remained steady at 4% and 3% respectively.

In sharp contrast, the Asia Pacific region (APAC) increased from 30% to 46%

Chart: Global MVNO market shares from 2015 - 2018

The Asia Pacific MVNO market was valued at $8 billion in 2017 and has shown accelerated growth, as governments across the APAC are leveraging MVNO growth to increase competition and enable the digital economy.

With a predicted compound annual growth rate of over 10% to year 2020, APAC is the world’s fastest growing MVNO region. Most of the connections provided by MVNOs today are in Australia, Japan, Hong Kong, Malaysia and South Korea.

APAC is the fastest growing MVNO region

India is relatively new in the market of MVNOs and as such, haven’t yet gathered valuable data.

In China, a range of well-known enterprises has launched various MVNO services i.e. Alibaba, JD.com, Haier, Lenovo, Xiaomi, Youku, Foxconn. The gaming MVNO Snail Mobile seems to have been particular in demand, as it announced 11 million subscribers at the end of 2017.

In 2014, the Ministry of Industry and Technology (MIIT) in China issued 37 licenses for MVNOs in order to stimulate competition in the market. As a result MVNO subscribers has grown from 2 million at the end of 2014 to 51 million in 2017, and expected to reach 72.7 million at the end of this year (2018), equal to a 4.10% share of the total mobile market.

Japan also changed its regulations in favor of MVNOs to boost growth, requiring traditional mobile operators to unlock SIM cards and stop offering smartphones at zero price with 2-year contracts in order to stimulate the market. As a result, Japan now has 83 MVNOs offering services.

In Singapore, MVNO Circles Life was a prime example of MVNOs introducing competition and innovation into in a market. The MVNO is on track to take 5% of Singapore's post-paid market this year, less than three years after its launch.

The four newcomers woke up the sleeping lions, and since then the market has seen heavy price cuts from the traditional operators much to the benefit of consumers.In Thailand, nine MVNOs have been launched since 2009 – 6 remain more or less active with less than 350,000 subscribers combined, of which the MVNO Penguin has 300,000. The later announced its move from being a MVNO on state telecom operator CAT Telecom, to the other state telecom operator TOT.

The MVNO 168 (formerly known as 365 Communication) seems to have ceased its marketing efforts (website is offline) Despite investing heavily in marketing, the MVNO never managed to get the support needed from its host operator (CAT Telecom).

The three traditional mobile operators enjoy almost complete dominance in the market with a combined 97.8% market share. However (or because of this) there is a high interest from both national and international companies looking to launch MVNO in Thailand, as reflected in the 57 MVNO licenses that has been awarded so far.Consumers in today’s digital economy require personalized, and innovative telecom services, however traditional mobile operators continue to deliver one-size fits all service, and offers which does not resonate with individual segments.

Enterprises are increasingly demanding complete lifecycle services to support their digital business models, but are often met with standard offers of connectivity from the traditional mobile operators.

Telecom regulators are more open to MVNO because of consumer pressure and due to a recognition of the economic value of maximum utilization of spectrum, infrastructure investment, innovative technologies and services.

Operators are also increasingly starting to understand the value of MVNOs as partners in a common fight to grow market shares, as markets are shifting from a supply focus, into a demand driven reality.