The third edition of the MVNOs Latin America event, held in Mexico City in May, highlighted the fact that Mexico is still home to a growing market for the sector, with 15 MVNOs holding a collective 1.5 million mobile subscriptions as of the end of 2017. The total accounts for 1.3% of the mobile market, only three years after MVNOs were fully launched in the country. Although some had higher expectations for the sector's performance, these figures are roughly in line with the global 3% market share of MVNO subscriptions. As participants at the event discussed, the MVNO market is a highly competitive one, with a successful business case requiring niche offers, a deep knowledge of customers, strong relationships, integration with a core business, a customer-oriented approach, cost control, and a partnership model with a mobile network operator. New technology trends show that MVNO models are evolving toward a focus on innovative IoT and eSIM technology.
Although Colombia has the largest and most stable MVNO market in Latin America, with 4 million MVNO subscriptions, accounting for 7% of the mobile market, Mexico has shown the greatest growth in the past few years, seeing the rollout of 15 MVNOs to become the second-largest MVNO market in the region. The rise of MVNOs in Mexico has led to price reductions and consumer benefits, due to new competitive dynamics and telecoms reform.
Movistar is the most established MNO wholesaler, hosting 12 MVNOs (through three MVNE platforms) on its network and following a clear strategy of developing partnerships with niche-focused operators. Telcel launched an MVNO wholesale offer as part of its regulatory requirements, having been deemed a "preponderant agent" by the regulator, and currently hosts three MVNOs. Altan Redes, the winner of the contract to build and run a national 700MHz wholesale network, launched operations in March 2018 and has three wholesale products (two mobile and one fixed broadband). Altan Redes explained during the MVNOs Latin America event that although no operators are currently delivering service on its network, which covers 30% of the country's territory (alongside roaming agreements for unserved areas), several players are interested and some are about to launch commercial services.
An interesting MVNO model was presented by Tokamovil, which offers a financial-inclusion-focused MVNO through a virtual credit card powered by Visa, a key partnership for the success of this model. It is aimed mainly at millennials, offering a credit card that can be used only for e-commerce (via apps and sites such as Uber, Netflix, and Amazon). Credit is granted to each SIM holder according to their risk level, with credit amounts limited to MXN1,000–3,000 ($50–150). Only postpaid plans are offered, starting at MXN190 a month. The credit card doesn’t have an entry or maintenance fee, and balance payments can be made at authorized banks, which creates an excellent option for unbanked young people. Customers use the Toka app to check their balances.
With MVNO models evolving, many at the event agreed that a mere cheap-reseller strategy has proved not to be sustainable. New models are appearing along with the launch of the GSMA's global eSIM standard, which brings reduced acquisition costs, flexibility in terms of SIM configuration, and a large IoT opportunity. Examples of interesting opportunities for MVNOs in Mexico and Latin America in the coming years presented by attendees at the event include digitization; innovative offers such as those aimed at financial inclusion; mobility services for fixed-only operators, such as the MVNO set to be launched in Argentina by Catel; and IoT.
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"Comcast leads with competitive mobile offering, but will still face challenges," TE0009-001626 (April 2017)
2018 Trends to Watch: Latin America, GLB007-000079 (June 2018)
Sonia Agnese, Senior Analyst, Latin America