That total was up 25% on the previous year, and MVNOs now account for 2.75% of the world’s mobile users. By 2010 the proportion is projected to rise to 3.3%, representing more than 100m subscribers.
So the MVNO business is good? Not necessarily. Pyramid Research contends that the MVNO business faces many challenges and its financials are not as attractive as might be supposed. Few MVNOs are making big profits; margins as high as 10-15% are rare.
Pyramid thinks that the next 24 months will make or break most MVNOs, with those focussing on prepaid users particularly vulnerable. But “2006 will see the emergence of next generation MVNOs who are striving to turn the traditional MVNO model on its head by focusing on ARPU and generating better margins”.
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