Prosperity On The Horizon For MVNOs

Staff On Jun 25 2001 - 6:00am

Tired of partnering with the same old wireless carriers? As high-capacity 3G networks proliferate, so will mobile virtual network operators (MVNOs), giving retailers an opportunity to team up with new network operators, according to a Strategy Analytics study.

The study bodes well for Virgin Mobile, the U.K. MVNO that is reportedly teaming up with Sprint PCS to offer Virgin-branded service in the U.S.

In its study, Strategy Analytics said MVNOs will account for about 10 percent of global wireless-phone revenues by 2005, or $65 billion. The airtime-reseller strategy provides "opportunities for companies to offer cellular service without the expense and outlay of acquiring licenses and building a network," the report said. "The 'virtual operator' idea is particularly attractive to those companies with well-known consume r brands who wish to offer a value-added service to their existing customers and in doing so attract more clients."

Strong brands won't be enough, however. "Services are the MVNO key means of differentiation," said analyst Sara Harris. "Strong brands will attract customers, but seductive, desirable services will retain them."