The market of MVNO in Russia and Europe: main trends and development prospects

June 2016

Analytical Report (full version)

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Analytical Report (full version)

The market of MVNO in Russia and Europe: main trends and development prospects
The market of MVNO in Russia and Europe: main trends and development prospects
June 2016

The market of MVNO in Russia and Europe: main trends and development prospects

June 2016

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The market of virtual operators in the developed countries of Europe has come a long way from the first MVNO discounters to solution providers in the field of machine-to-machine communications and Internet of things. This experience will be useful for the players of Russian MVNO market for the development of innovative technological and business models and for their further entry into new segments and niches of the market.


J'son & Partners Consulting presents brief results of its study of the main trends and prospects of the MVNO market development in Russia and Europe.



The European market


Europe holds a leading position in the world in number of operating virtual mobile operators – 585 MVNO, or 59 % of all MVNO of the world, excluding "second" brands of mobile operators. The high popularity of MVNOs in Europe is primarily due to the industry national regulators’ desire to increase competition and reduce retail prices for mobile communication as well as the operators’ willingness to maximize the use of their network capacity and radio frequency spectrum, including in the segment of 4G/LTE networks.


The development of the MVNO markets on the European continent fragmented by geography. The leading positions amongst independent virtual operators in Europe are held by Germany, UK, Netherlands, France and Spain, which totally give almost 2/3 of all independent MVNO. In these countries, as well as in Denmark and Belgium, the combined share of MVNO (excluding "second" brands) exceeds 10%.


According to forecasts from Pyramid Research in 2015-2020 the annual growth rate (CAGR) of MVNO subscribers in Europe will be 5%, and at the end of 2020 the total quantity of MVNO subscribers in the region will reach 110.7 million. The most promising segments are mobile data, M2M, roaming and ethnic projects, while the strategy of MVNO-discounters in developed European markets no longer guarantees success for these directions.


According to J'son & Partners Consulting, the potential of the MVNO market in the developed countries of Europe remains high, despite the reduction of its share in some countries (France, Spain, etc.) as a result of mergers and acquisitions. Forecasts for the MVNO market in quantitative and monetary terms have a high probability of realization.


Taking into account technological development and departure from the classical SIM cards to embedded/virtual SIM cards (eSIM), pre-installed in the subscriber devices, the classic MVNO model will be transformed into one, in which the profiles of existing infrastructure operators will be "poured" through the air. However, users (both humans and machines and mechanisms) can be dynamically adjusted on the best connection in this location in terms of the channel quality and tariff.



The Russian market


According to J'son & Partners Consulting, by the end of 2015 there were about 2.2 million subscribers MVNO in Russia, which is not more than 1% of the total number of active SIM-cards in the country. This corresponds approximately to the level of developing countries of Latin America and Eastern Europe and suggests that the MVNO market in Russia is still in a very early stage of its development. According to J'son & Partners Consulting (baseline scenario), the share of MVNO will be by 2020 about 2% (5 million subscribers).


The major limiting factors of the MVNO market development are associated with the disinterest of Russian major cellular operators ("the big three") to increase competition in conditions of absence of regulatory pressure. As a result, it is difficult and often even impossible for the potential independent MVNO in Russia to negotiate with mobile operators about renting a cellular infrastructure. Another brake is the unavailability of the regulatory framework. In particular, the law does not define the conditions for activity of MVNA aggregators, which could be mediators for small virtual operators in commercial agreements with mobile operators for more favourable terms through the scale effect. The development of major MVNO of "full cycle" (Full MVNO) is constrained by the need for high capital costs in terms of complexity of realization of infrastructure sharing.


The analysis of existing MVNO projects at different stages of implementation in Russia, as well as planned, closed and "frozen" projects, has shown that the most "sustainable" of them are MVNO projects, launched by telecommunication companies within groups of companies (MTS, MegaFon).


The largest MVNO in Russia is Yota with around 1.7 million subscribers at the end of 2015 and a market share of 78% of all MVNO subscribers. Other major projects include "Allo Inkognito", MGTS, SIM-SIM, Matrix Mobile and Aiva Mobile:



The Russian MVNO market’s characteristic feature from the target audience’s point of view is the lack of discount operators (the niche is occupied by Tele2) and niche MVNO which are targeted at different social and age groups (this niche is occupied by mobile operators).


During the implementation of projects on the Russian MVNO market, the participants need to consider both positive and negative European experiences with all the changes in the mobile market in general and prospects of its development.

Still promising areas in Russia are data MVNO (especially international roaming), the ethnic MVNO projects for large corporations; package offers from fixed-line operators which include mobile communication; in the medium and long term projects in the field of IoT ae also very promising.



Detailed results of the research presented in the full version of the report:

«The market of MVNO in Russia and Europe: main trends and development prospects»


The contents



1. Summary

1.1. The MVNO market in the developed countries of Europe

1.2. Cost analysis of MVNO

1.3. Key risks for MVNO

1.4. Industry analysis according to Porter and PEST-analysis of the MVNO market

1.5. The MVNO market in Russia and Eastern Europe


2. The MVNO market in the developed countries of Europe

2.1. Main types of the market players (MVNO, MVNE, MVNA)

2.2. MVNO classification (including types of offered services) and examples of projects

2.2.1. MVNO classification by target groups

2.2.2. MVNO classification by infrastructure features

2.2.3. MVNO classification by services

2.3. The total market volume in the segment of MVNO

2.3.1. The number of MVNO-projects

2.3.2. Subscriber base

2.3.3. The market volume in monetary terms

2.4. Main drivers of the MVNO market development

2.4.1. The evolution of technologies

2.4.2. Regulating

2.4.3. Other

2.5. The MVNO market development in the EU

2.5.1. Austria

2.5.2. Belgium

2.5.3. UK

2.5.4. Greece

2.5.5. Germany

2.5.6. Denmark

2.5.7. Italy

2.5.8. Ireland

2.5.9. Spain

2.5.10. Netherlands

2.5.11. Portugal

2.5.12. France

2.5.13. Finland

2.5.14. Sweden

2.5.15. Norway

2.5.16. Switzerland

2.5.17. International MVNO Lycamobile Liberty Global Ortel Mobile Transatel

2.6. Operating expenses of the Full MVNO

2.7. Key risks for MVNO

2.8. Analysis of the subscriber connection average costs

2.9. Capital costs of the new product launch and "maintenance" CAPEX

2.10. Industry analysis accoirding to Porter and PEST-analysis of the MVNO market

2.10.1. Industry analysis accoirding to Porter

2.10.2. PEST-analysis of the MVNO market Political and legal factors Economic factors Social factors Technological factors


3. The MVNO market in Eastern Europe countries (For each country an assessment of MVNO penetration is given as well as an analysis of the main trends and prospects of the market development and development strategies of the largest MVNO)

3.1. Czech Republic

3.2. Poland

3.3. Romania

3.4. Slovakia

3.5. Hungary

3.6. Other countries


4. The MVNO market in Russia

4.1. Background and brief history of the origin of the MVNO market in Russia

4.2. Main drivers and constraints

4.2.1. Main drivers of the market

4.2.2. Barriers to the MVNO market development

4.2.3. Subscriber base and penetration of MVNO

4.3. Overview of major projects (existing, closed, planned)

4.3.1. Existing and future MVNO-projects

4.3.2. Suspended and closed projects

4.3.3. Other projects

4.4. The MVNO market legislative framework in Russia

4.4.1. Licensing

4.4.2. Allocation of numbering capacity

4.4.3. Regulatory perspectives

4.5. Prospects of development of communication services on the model of Full MVNO in Russia

4.6. MNVO formats: MVNO tariff, maintenance MVNO and full cycle MVNO

4.6.1. Advantages and disadvantages of MVNO of full cycle

4.6.2. Promising business models

4.7. Forecasts of the MVNO development in Russia


The report contains 42 figures 19 and tables.



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The newsletter prepared by J'son & Partners Consulting. We work hard to provide factual and prognostic data that fully reflect the situation and which are available at the time of the release. J'son & Partners Consulting reserves the right to revise the data after publication new official information from individual players .


J'son & Partners Consulting presents brief results of its study of the main trends and prospects of the MVNO market development in Russia and Europe.