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The global mobile virtual network operator (MVNO) market size was USD 67.54 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with mobile MVNO witnessing a positive impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 7.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 72.52 billion in 2021 to USD 123.40 billion in 2028 at a CAGR of 7.9% during the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Mobile virtual network operators are the wireless network providers, which offer internet services to customers without them owning any network. The market expansion is majorly contributed by the increasing number of mobile phones and mobile subscribers. The growing demand for features, such as fast internet connectivity, online gaming, streaming, and video conference, is driving the demand for network operators. Key companies are collaborating with network providers to expand business offerings and gain more customers. For instance, in September 2020, ASDA Mobile, one of the retailers in the UK, announced an agreement with Vodafone for its services.
High Internet Traffic Surged MVNO Adoption during COVID-19 Crises
Industries across the globe faced extraordinary challenges during the pandemic crisis in 2020. In sharp contrast, the telecommunication industry witnessed exponential demand during the lockdown restrictions. This surging demand for remote working and video conferencing to meet industry-specific demand has resulted in high internet traffic. Similarly, the online streaming industry witnessed swift adoption during the coronavirus pandemic. As per the Forbes report, Netflix subscriptions rose 47% and HBO Now signups increased 90% owing to work-from-home.
The growing demand for online communication, online streaming, remote schooling, and e-health is fueling internet traffic globally. For instance, in the UK, Vodafone witnessed 50% more traffic in 2020. This has lifted the demand for mobile virtual network operators during the pandemic for efficient connectivity. For instance, Comcast’s Cable Communications witnessed a hike in customers by 455,000 in the first quarter of 2020, making it a total of 33.1 million customers. Further, in the fourth quarter, the company gained 6.3% growth owing to its voice, wireless, high-speed internet, video, and business services. Thus, the MVNO market witnessed significant gain during the COVID-19 pandemic and is likely to grow steadily post-pandemic.
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Growing eSIM Trend to Reshape Mobile Virtual Network Operators Market
The embedded SIM card (eSIM) reduces the requirement of a physical SIM card. The technology offers more freedom to the consumers for selecting the network directly from their mobile phones. This is expected to accelerate the adoption of mobile virtual network operator services over the period.
The option for selecting network operators is expected to increase collaboration between market players and Original Equipment Manufacturers (OEMs). Further, eSIM is expected to open opportunities in industries adopting IoT and individuals traveling abroad. For instance, in April 2020, Infineon launched its integrated eSIM named, OPTIGA Connect, which will offer cellular coverage in almost 200 countries. As eSIM can store operators’ profiles, the user can shift to the operators present in the country, thus eliminating the need for roaming packages. Thus, various service providers are offering eSIM. For instance, in October, Telrite Holdings acquired network operator brands H2O Wireless and Pure Talk to offer eSIM in the first quarter of 2021 on the AT&T network. Thus, eSIM is expected to fuel market growth.
Network Slicing of 5G Technology to Provide Growth Opportunities for the Market
The 5G technology and network infrastructure are expected to provide vast opportunities for the operators in industries, such as BFSI, transport, healthcare, and retail to provide enhanced connectivity services. 5G MVNO is likely to offer boundless connectivity, which can support customers to shift between 5G and 4G services. The network slicing of 5G technology provides opportunities for network operators to offer differentiated and innovative services. Thus, service providers can target different applications and markets through the slicing technique. This is likely to surge the demand for mobile virtual network operators.
As per the industry experts, 5G is expected to create opportunities in industrial critical machine applications such as IoT. 5G MVNO can offer efficient communication services with low latency for end-users such as m-health applications, industrial robots, drones, and connected cars. Further, 5G offers the operators to launch their own virtual network operators. For instance, in 2017, Vodafone launched in-house Voxi to target youth over selected social apps. Thus, 5G technology is expected to drive market growth.
High Vulnerability to Fraud and Security Breach Might Challenge Market Growth
The mobile virtual network operator runs its services over mobile operator infrastructure without handling business systems and networks. With its rapidly increasing demand across end-user applications, the service has gained high vulnerabilities to fraud and risk of security. The market was expected to and witnessed a gradual shift of fraudsters’ attacks on network operator services. One of the frauds in the industry is roaming fraud, which is highly impacting telecommunication businesses with huge revenue loss. As per Mobileum, among USD 29.2 billion worth of fraud losses, roaming fraud accounts for USD 15.6 billion fraud. This is expected to create challenges for market growth.
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Increasing Demand for Roaming Services to Fuel Full MVNO Demand
Based on operational model, the market is segmented into reseller MVNO, service provider MVNO, and full MVNO. Full MVNO is expected to reach and to gain maximum market share along with fast growth. The growing demand for international connectivity and roaming data is driving the adoption of this segment. The service provider MVNO segment is expected to gain significant growth during the forecast period. It owns a billing platform and customer services that help in offering an independent pricing model and a competitive edge to the provider. The reseller MVNO is likely to gain slow growth during the forecast period. The value-added services offered by resellers are expected to drive its demand.
Cost-effective Plans Offered by Prepaid to Surge Mobile Virtual Network Operators Demand
Based on the service type, the market is bifurcated into postpaid and prepaid. The prepaid segment is expected to show rapid growth during the forecast period. The increasing adoption of smartphones and surging demand for low tariff plans are driving the demand for prepaid operator services. Leading companies are also focusing on enhancing prepaid services considering high growth potential. For instance, in September 2020, Verizon Wireless acquired prepaid provider TracFone Wireless, Inc., in an agreement with America Movil. The postpaid segment is likely to lead the market owing to its unlimited service provision and facility of roll-over unused data. This is likely to drive the market expansion.
Rapid Adoption of Mobile Phones amongst Individual to Boost Market Potential
Based on the subscriber, the market is bifurcated into business and individual/residential. The individual/residential segment is expected to dominate the market and is likely to gain rapid growth during the forecast period. The growing demand for mobile phones and high-speed connectivity for web conferencing, video streaming, connected devices, and tracking locations is driving the adoption of network operators amongst individuals. Similarly, the business segment is likely to show steady growth during the forecast period owing to the increasing adoption of cloud technology for better communication.
Europe Mobile Virtual Network Operator Market Size, 2020 (USD Billion)
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By region, the market has been analyzed across five major regions, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
Europe is expected to dominate the market during the forecast period. The presence of prominent telecom providers in the region is likely to drive the market. Further, countries, such as Germany, the UK, France, and Spain, are expected to surge the demand owing to the highly supportive regulatory frameworks. The initiatives, such as Roam-Like-At-Home, are expected to spark free-roaming packages in the European Countries. Several small and large companies are focusing on expanding in the region owing to the growing opportunities in the region. For instance, in September 2020, a cloud communication company, Pareteum Corporation, announced a collaboration with provider Genza to access voice and SMS services.
North America is projected to rank second in market share during the forecast period. The growing adoption of voice-over-internet protocol VoIP, mobility services, and data services is likely to fuel the demand for mobile virtual network operators. The growing partnership between businesses and operators is likely to boost the market potential in North America. Similarly, South America is estimated to showcase steady growth during the forecast period. The increasing mobile subscription and machine-to-machine service are anticipated to boost the market in South America. Mexico’s shared network solutions are likely to create vast opportunities for players to expand the market.
Asia Pacific is likely to gain significant growth during the forecast period owing to the quick expansion of the telecom industry in the region. China is expected to lead the region with maximum share. Further, telecom services are witnessing increasing investments from countries such as India, Singapore, Japan, and South Korea. This is expected to boost the market.
The Middle East and Africa are expected to gain rapid growth during the forecast period owing to the rapid adoption of internet-based advanced technologies. With strong local players and increasing focus of other leading players, the region witnessed significant growth. In the year 2017, Virgin Mobile Middle East and Africa showcased rapid growth by servicing 3.5 million customers. This is likely to drive the mobile virtual network operator market growth.
Growing Partnership to Expand Market Opportunities for Key Players to Expand Business
Key players, such as Virgin Mobile USA Inc., Xfinity Mobile, Tracfone Wireless, Verizon Wireless, T-Mobile US Inc., Google Fi (Google LLC), Boost Mobile, and Lycamobile, are expanding global business through strategic partnerships and collaborations. The players are collaborating with mobile operators to offer dedicated network services to the customers. Further, these players are investing in advanced infrastructure for implementing next-generation network operators.
December 2020 – SMARTEL Services GmbH and Cyan AG announced a partnership in Central Europe to develop and launch an MVNO platform for next-generation operators. The companies are offering advanced technical infrastructure for the new mobile operators for providing services without offering their own network.
November 2019 – Virgin Mobile USA Inc. announced Mobile Virtual Network Operator agreement with Vodafone UK till the year 2026. Through the deal, Virgin Mobile offers its new services including 5G for the 3 million plus customer base.
An Infographic Representation of Mobile Virtual Network Operators Market
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The market research report highlights leading regions across the world to offer a better understanding to the user. Furthermore, the report provides insights into the latest industry growth trends and analyzes technologies that are being deployed at a rapid pace at the global level. It further offers some of the drivers and restraints helping the reader to gain in-depth knowledge about the market.
Value (USD Billion)
Operational Model; Service Type; Subscriber; and Region
By Operational Model
By Service Type
According to Fortune Business Insights, the global market size is expected to reach USD 123.40 billion by 2028.
In 2020, the market value stood at USD 67.54 billion.
The market is projected to grow at a CAGR of 7.9% during the forecast period.
The Full MVNO segment is expected to be the leading segment in the market.
The introduction of 5G is the key factor driving the market growth.
Virgin Mobile USA Inc., Xfinity Mobile, Tracfone Wireless, Verizon Wireless, T-Mobile US Inc., Google Fi (Google LLC), Boost Mobile, Lycamobile among others are the top players in the market.
Europe is expected to hold the highest market share.
The Middle East & Africa is expected to grow at the highest CAGR during the forecast period.
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