Industry Observers See MNO Opportunities in Leasing Network Space to MVNOs
Observers say MVNOs are presenting growth opportunities for network-owning service providers.
NEW YORK, November 15, 2023 – Wireless industry observers are seeing more providers opening up their networks to mobile virtual network operators as an opportunity to diversify revenue sources.
Large mobile network operators with additional network capacity can lease that to MVNOs that don’t have such infrastructure, allowing for more such service-based shops to emerge.
“Twenty years ago, [it was] don’t touch the network, no one’s getting on the network, it’s not open, it’s completely closed,” Kelly Green, CTO at telecom venture capital firm TelcoDR, said at Jeff Pulver’s Fall 2023 VON Evolution conference in New York earlier this month.
“But small pockets of these organizations…are saying if we don’t do this we’re not going to survive and there’s a huge opportunity in doing so,” she continued. “So I think these days, we talked about monetization and sharing capacity – anyone can look like a virtual network operator and you know it’s up to the service providers to be able to service that innovation.”
Suzanne Hellwig, assistant vice president for 5G Ecosystem and Alliances at AT&T, speaking with Green at the VON Evolution conference, added that MVNO agreements are becoming so prominent these days because it is increasingly easy for entities outside the telecom space to become operators with minimal startup costs.
To underscore Hellwig’s point, Green pointed to the MVNO Mint Mobile, an online-only virtual service provider founded in 2016 by telecom entrepreneur David Glickman, who previously developed Ultra Mobile. The company was later purchased by Hollywood actor Ryan Reynolds, with him becoming an owner in 2019.
The operator offers a variety of phone plans, which vary in prices from $15 to $30 per month. The company’s marketing philosophy is built on the idea that phone plans and data should be affordable.
Mint Mobile was purchased in a larger acquisition by T-Mobile in March of this year, when T-Mobile set out to pay up to $1.35 billion to take on Ka’ena Corporation, Mint Mobile’s parent company.
Observers noted the marketing-driven focus of the Mint brand, as Reynolds features as the main character in the company’s humorous advertisements.
Hellwig added that the MVNO space is easy for people with great influence or sublime marketing ability to enter because as we look toward younger generations signing up for phone plans, brand loyalty matters.
She used her kids as an example. She said while they may not be passionate about AT&T, they could be passionate about familiar influential people offering phone plans.
To alleviate regulators about competition concerns in the wake of T-Mobile’s quest to acquire Sprint, T-Mobile COO Mike Sievert said the telecom would continue all MVNO agreements following the acquisition and cited in a 2019 earnings report phone call that the capacity they create with their network provides incentive for T-Mobile to take on MVNOs.
Fortune Business Insights, a market research consulting firm, released a report in March that said global MVNO market size was valued at $78.15 billion in 2022 and is projected to generate $149.13 billion in 2030.
The report cited factors like 5G ecosystems and rapidly developing wireless technology driving that growth.
