Mobile Virtual Network Operator Revenue to Reach $20 Billion

eMarketer: Mobile Virtual Network Operator Revenue. Predicts MNVOs will become crucial partners for network operators and brands. In the coming years, MNVOs will become increasingly important as the competitive wireless industry shifts the focus from growing market share to growing wallet share.

An MNVO is any organization that leases network capacity from an incumbent mobile operator. This broad definition has allowed for a wide range of MNVOs to develop, varying all the way from a simple no-frills wireless service carrying their name to an entire mobile media service.

In the US and UK, incumbent wireless operators have topped out their ability to reach a mass market with a mass brand. Despite a number of disappointments this year from MNVOs such as ESPN Mobile's lackluster results and the indefinite postponement of Disney Mobile UK, MNVOs will be vital partners in compensating for the price erosion experienced by incumbent operators,

Given that mobile voice is already a commodity, the ability to differentiate based on non-voice, brand-oriented factors becomes all the more important.

Currently, there are over 26 million subscribers in the US and UK, but by 2010, the overall subscriber base for MNVOs will grow to 47.8 million customers and generate $20.7 billion, eMarketer predicts.

It is unlikely however, that the classic MNVO business model–using new or familiar consumer brands to penetrate markets where mass-market wireless operators couldn't reach–will be successful. The MNVO future will involve intelligent co-branding with an incumbent carrier and other players.

The days when an incumbent mobile operator or an MNVO 'owns' the customer are drawing to a close. Sharing the customer is the likely way forward to make money in an era of commodity mobile bandwidth. Don't believe it? Look in your wallet and count the number of brands represented on a typical credit card if you want to see a plausible future of MNVOs.

• What is the MVNO play for marketers?

• What tangible assets do brands need in order to exploit the wireless channel?

• How big is the MVNO opportunity for marketers?

• What should marketers do now in order to prepare?

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