United States Mobile Virtual Network Operator (MVNO) Market Outlook, Size, Forecasts

The United States Mobile Virtual Network Operator (MVNO) Market is expected to register a CAGR of 4.21% over the forecast period from 2020 to 2025. The mobile virtual network operator (MVNO) market in the United States is considered mature and developed. The MVNOs first started operation in the United States in 2011. Since then, the MVNO market has had prolonged growth compared to the increase in the number of mobile subscribers. The United States has four major carriers, which provide network infrastructure to 139 MVNOs who serve their 36 million active subscribers as of April 2019, as reported by GSMA. MVNOs flourished in the United States due to the Lifeline program run by FCC in the United States. The major States in the United States have partnered with a few MVNOs to provide mobile and broadband services at a very subsidized rate.

– Mobile virtual network operators (MVNOs) are facing a wave of change as evolving demand and competition, and technology advancements bring the latest opportunities and challenges for MVNOs and their mobile network operators (MNO) hosts. The US mobile market is moving towards saturation and a crossed 80% penetration rate during 2019 with big companies such as T-Mobile, Verizon, and AT&Tcommanding significant share of the country’s user base. 

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Key Market Trends

Rising Demand for Efficient Cellular Network is Expected to Drive the Market

– The rising demand for an efficient cellular network is a significant factor driving the need for MVNOs in the market. Growing internet and smartphone penetration and the need for high speed around the globe, are forcing customers to opt for the most efficient network operator. The growing number of connected devices, machine to machine communication, cloud, IoT, Industry 4.0 and edge computing, among others, are some of the market trends that are making it necessary to adopt high speed and efficient networks. Also, factors such as the increasing use of advanced devices and increasing network speed have led to high growth in the use of data applications such as video streaming and internet browsing in the United States.
– Owing to the digital transformation in the United States, its is expected that MVNOs would target IoT and machine-to-machine (M2M) and connectivity. These providers would aid in expanding out-of-the-box connectivity bundled in with devices and other services in the everything connected world: vehicles, medical devices, wearables, industrial equipment, etc. The data transmitted during the M2M connection is very low due to which the IoT device providers tend to prefer operators who could provide attractive pricing and packages. MVNOs, due to their business model, are best suited to serve this industry and will further increase their penetration in this segment in the future.

Resellers are Expected to Hold Significant Share

– Resellers are the third-party arrangement, selling a provider/operator’s services and piggybacking a standard service SLA. One bill is issued through the overall service provider or operator. A reseller MVNO will either operate under its brand or co-brand with the MNO. Mostly, the branded reseller brings brand distribution channels or a large existing customer base to the table, from which it can leverage its sales. The choice of an operational model for the MVNOs is highly influenced by the operators’ willingness for the associated risks and the cost of operations. The business process makes the MVNO market more of a business with less capital expenditure estimated at around USD 3.5 million and peak project funding estimates in the range of USD 6 million to USD 8 million.

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Christophe Rude

Christophe Rude

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