Watch out – the MVNO’s are coming

New Media Age reports that Mobile Virtual Network Operators (MVNO’s) are about to launch following huge success in Northern Europe. Due to the significantly lower cost base, prices have plummeted in a matter of months.

In Denmark the price of a mobile minute has dropped from E0.17 to E0.09 (11p-6p) in only six months, and an SMS has fallen from E0.07 to E0.03 (4.5p-2p). The price of a subscription has fallen from E6.70 to nothing. The discount mobile operators claim 23% of voice traffic in Denmark, and close to 30% of text traffic.

TDC, the largest operator in Denmark with 46% market share, experienced voice-per-minute growth of 19% in 2003, at the same time seeing a 22% decline in ARPU. Its pre-paid ARPU in Q1 2002 was E7.5 ; in Q1 2003 it was down 50% to E3.6.

Frankly, I’m surprised that this hasn’t been launched before – it’s been talked about for years.

Good old Stelios’s easyGroup will be one of the first entries into the market. Though Sir Richard Branson says he doesn’t believe in it. Well, he would wouldn’t he? But how can you not believe in something already proven in four other markets? It’s a bit like not believing in SMS, or something.

New Media Age also point out that it’s not about IF they’ll launch but when and who

The question is who will launch these discount companies: media companies that have free advertising in their own media, or other players?

Picking up on an earlier thread, operators really need to start building themselves as brands before it’s too late. And the key to this will be developing compelling content.

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