Virtual Mobile Operators in Regional Perspective

The business model for the commercialization of cellular voice and data services through the offer of Virtual Mobile Operators (MVNO) registers an accelerated dynamism in the main countries of the Latin American region, based on the growing attraction and capture of users and the generating value for them. In turn, this upward trajectory has boosted the addition of subscribers and revenues of the mobile market, which is characterized as the segment with the greatest economic contribution and adoption within the telecommunications sector.

It is worth remembering that MVNOs are characterized by being a supply scheme that does not require the deployment of infrastructure, but rather uses the installed and available capacities of traditional operator networks. In other words, MVNOs do not have spectrum concessions or infrastructure investment obligations and are limited to offering data plans, minutes, messages and various value-added services.

Market Footprint in Latin America. The differentiation with respect to other operators through the packaging of services, applications, promotions, clubs, payment facilities, among other elements, has led to the entry, growth and consolidation of MVNOs in Latin American countries such as Brazil, Colombia, Mexico, Peru , among others.

At the end of 2021, Colombia was the country in the region with the largest mobile market footprint (7.7%) of the MVNO sub-segment with providers that provide benefits and added value such as Unicorn Mobile, dedicated to the LGBTIQ+ community; Kalley Móvil and Móvil Éxito, for clients of their respective department stores, while Wings Mobile does so with its own range of cell phones, computers, scooters, smart watches and water filters, among others.

In Mexico, MVNOs have grown in recent years as an affordable alternative for users by competing with lower rates and adding value to their main offer. Thus, they consolidate a 5.2% share of total lines as of 4Q-2021, which positions it as second place in the region. These are the cases of the Elektra department store, through Oui, the OXXO convenience store with OXXO CEL, and the Walmart and Bodega Aurrera supermarkets with Bait. Likewise, they complement the provision of other telecommunications services, such as FreedomPop’s alliance with Dish or izzi’s convergent offer with izzi mobile.

Dynamism of the MVNOs in the Region. In Brazil and Argentina, although the levels of competition in Chile are not recorded, the mobile market is concentrated by traditional operators, whose proliferation has occurred at the expense of MVNOs that have not managed to scale their user acquisition. However, in the Brazilian case, as in the Mexican case, the generation of added value for users has driven the sub-segment to register marked growth rates of 112.8% and 71.4% as of 4Q-2021, respectively.

Similarly, Peru registered rapid growth in its first years with this type of operator, such that MVNOs have gone from accounting for 0.02% to 0.4% of market share, going from just 18,382 lines in 2019 to almost 182,000 in 2019. end 2021.

Based on the foregoing, it is identified that the incursion and learning phase is being left behind, today the MVNOs are beginning to gain ground in terms of lines and also to monetize their efforts, in order to trigger the growth of the market as a whole.

It is foreseeable that this expansion route will continue and in the medium term, they will become even more relevant players in the mobile telecommunications market in the region.

@ernestopiedras