MVNO – The Future of Mobile services

The US Mobile Market has now reached a pivotal point. Several factors have contributed to make the MVNO opportunity a desirable proposition for those wishing to obtain a lucrative piece of the US Mobile Cellular market:

• Number portability – Recently introduced, Customers can switch between networks and keep their number. Churn is expected to rise to 20% in 4 years.[1] By then established MVNOs will be able to target 10s of millions of customers who are looking to change Carrier.
• Maturing US market – Marketers have made customers aware of phone types, networks, call plans, Ringtones, Picture messaging, text voting etc. 66% of Virgin Mobile USA customer have downloaded 250,000+ ringtones since its launch.[2] More than 53% of Virgin’s customers used text-messaging in December, 2003.
• Customers are beginning to look for more than just a phone service; they are looking for a lifestyle.
• Prepay – After several mistakes in prepay segment by Carriers, the US market is now experiencing a prepay surge. Previously under served cash-only customers are now significant adopters of Cellular phone services. Current prepay models can be improved upon significantly. Prepay will overtake traditional pay-monthly calling plans (up to 70% of all Mobile Cellular customers will be prepay.[3])
• Virgin Mobile USA – This leading MVNO now has almost 2 million customers after less than 2 years in business. This indicator suggests that the market is ripe for Consumer branded MVNOs. Virgin has successfully translated their very hip, cool and trendy brand into the Mobile Cellular world.

[1] Based on European data for Carriers in mature/fully penetrated markets where only mobile-to-mobile number portability exists. The US market also benefits from fixed-to-mobile number portability.
[2] Virgin Mobile USA launched a national service in June 2002 with Sprint as their Carrier partner.
[3] Based on European data for Carriers that offer both pay-monthly and prepay services.