MVNOs have been around since the late nineties with the launch of the first-ever MVNO, Virgin Mobile UK. Created to tap into underserved and often niche markets, MVNOs have always aimed to offer more flexibility and choice to consumers in the telecom market.
As of December 2022, 1,986 active MVNOs were operating around the world. MVNO market size is projected to grow from USD 84.6b in 2023 to USD 116.8b by 2028, at a CAGR of 6.7%. It’s safe to say the MVNO market is highly competitive. There is a huge MVNO graveyard that proves the point that merely competing on price will not win you market longevity or success.
However, within the market, you do have players who have clearly understood and mastered the basics of becoming an MVNO- five of which will be the focus of this blog. What does good look like in the MVNO world? What are the drivers for success? Let’s take a look.
Lyca Mobile
Founded: 2006
HQ: London, UK
Revenue: $1.6b (2015)
Number of Customers: 16m+
Number of Employees: 10k+
Network Carrier: EE (for the UK)
Lyca Mobile is the largest international MVNO in the world. With a focus on providing low-cost international calling rates, initially aimed at niche market segments like immigrant communities and students, Lyca Mobile has rapidly grown into an MVNO that everybody is watching. Operating in 23 different countries across 5 different continents, Lyca Mobile impressively acquires a new customer every 2 seconds through its highly focused, data-driven, omnichannel campaigns- so, you can understand the hype.
Lyca Mobile understood early on that knowing your customer at a deeper level is a key driver for success in the digital-age, which is why the business has invested heavily in enhancing its digital tools to unlock customer engagement and enhance brand loyalty. With a highly effective digital segmentation strategy based on user behavioral patterns, Lyca Mobile has focused on truly personalizing its offering to customers, finding success in experimenting and leveraging offers tied to significant cultural holidays like Diwali, Lunar New Year and Christmas. These highly custom, digitally-led campaigns, which have been localized accordingly, have resulted in increased usage on their platform as well as improving customer retention by 6%+.
Through a mixture of both a high-street and digital presence, Lyca Mobile has created a cohesive omnichannel experience for customers, with the majority of its revenue coming from its SIM-only products, that have appealed to their target demographic of immigrants and students, who generally prefer a prepaid offering. Offers include 30 days SIM-only plans with unlimited calls and texts, 50GB of data, and EU and India roaming, for just £6.50 ($8).
Lyca mobile has shown the market how a personalized, data-driven offering that truly meets the needs of its target demographic, has hit the mark and driven unparalleled growth.
Consumer Cellular
Founded: 1995
HQ: Arizona, US
Revenue: $1.25b (2015)
Number of Customers: 4m+
Number of Employees: 2400
Network Carrier(s): AT&T and T-Mobile
Consumer Cellular is the oldest MVNO in the United States and is a prime example of a business who has intelligently targeted and built its product offering around a specific and underserved demographic, the over-50s, and affiliated itself with partners who have complemented its offering.
Originally aiming to offer low-cost plans to customers, Consumer Cellular quickly realized competing on just price alone was not enough to build a winning market strategy. In 2007, they decided to offer affordable, no-contract cell phones and service plans primarily to the over-50s, later expanding its offering to include easy-to-use smartphones with senior-friendly features. In 2014, they went one step further and launched their GrandPad, a first-of-its kind tablet with the best features and functionality for the older generation, helping them to stay connected and entertained.
Consumer Cellular has also been smart when it comes to partners. In 2008, the business partnered with AARP, an interest group focusing on issues affecting those over the age of fifty in America. Consumer Cellular offers AARP’s 38 million members special discounts on its services, including offers like 5% of monthly rates and usage charges, 30% discounts on selected accessories and an extended 45-day risk-free guarantee.
Customer Service has also been a key focus for this MVNO. Consumer Cellular has invested heavily in its call centers and customer support offering, helping the business to be ranked #1 in customer service among wireless value MVNOs by J.D. Power, 14 times in a row. Impressive!
Don’t think Consumer Cellular is boring either. The MVNO has done some great advertising in recent years with the likes of Ted Danson for their ‘Ryan and Brenda’ commercials.
Overall, its combination of strategic partnerships and highly customer-focused approach has contributed to Consumer Cellular’s immense success in the US MVNO market.
Mint Mobile
Founded: 2016
HQ: California, US
Revenue: $100m+
Number of Customers: 2-3m
Number of Employees: 200+
Network Carrier: T-Mobile
If you haven’t heard of Mint Mobile, it’s safe to assume you’ve probably been living under a rock for the last 6 years. Hollywood actor Ryan Reynolds famously bought a majority stake in the MVNO in 2019, before it was sold to T-Mobile in 2023 for a staggering $1.35b- a deal that has been the talk of the telecom world for the last 18 months.
Mint Mobile’s success can be attributed to its disruptive approach to the mobile industry, offering low-cost plans by selling services online-only. Its transparent pricing, user-friendly App, fun marketing and emphasis on customer satisfaction, have helped the MVNO to attract and retain a large customer base in a short period of time. Its $15-per-month plans were particularly attractive to its customer base.
Mint Mobile was seen by many as the fresh, cool, new wireless carrier that moved away from the corporate, and sometimes soulless, offerings that can be found in the American telecoms market. It’s endorsement from Mr Reynolds also helped propel the companies visibility and street cred even further, landing it titles including ‘Best Budget’ wireless option and ‘#1 Purchase Experience’ from industry data and analyst firms.
A clear lesson in how celebrity affiliation, clever marketing and a low-cost, customer-first strategy can drive MVNO success.
Bait Mexico
Founded: 2020
HQ: Mexico
Number of Customers: 11.8m+
Network Carrier: Red Compartida
Walmart owned Bait (Bodega Aurrera Internet y Telefonia), has seen meteoric growth since it launched in 2020 and is the fastest growing telephony company in Mexico. From Q3 to Q4 2023, the MVNO added 3.8 million subscribers alone (for context, AT&T added 562k and Telcel added 417k in the same time period) and now accounts for almost 70% of the Mexican MVNO market subscriptions.
Bait is uniquely positioned to attract new customers through the integration of its connectivity services with the Walmart ecosystem. Customers shopping in a Walmex store in Mexico can receive a free MVNO chip with every purchase, along with additional offers of extra data, helping families stay connected in an affordable and cost-effective way. The benefits work both ways, with Walmart bolstering its online user traffic through digitally engaging customers through Bait’s offerings- a brilliant example of an omnichannel strategy that creates synergy between product offerings to drive customer acquisition and retention.
Bait has also focused on number portability for customers, a key driver for customer retention. For those of us who get attached to a phone number (I’ve had mine for 15+ years), getting this process right is important, and Bait has made sure this has been a focus.
Bait is on a mission to reduce the digital and connectivity gap in Mexico and with its strategic, creative and partner-led vision- it looks like it will succeed.
Snail Mobile
Founded: 2014
HQ: Suzhou, China
Number of Customers: 14m
Number of Employees: 1,500+
Network Carrier: Red Compartida
Snail Mobile is one of China’s largest, and oldest, MVNOs . The Chinese MVNO market only opened up in 2014 when MIIT, the Chinese telecom regulator, decided the market should be opened to provide competition against China’s dominating and state owned MNOs – China Mobile, China Telecom and China Unicom. Snail Mobile is a branch of the Suzhou Snail Digital Technology Company, one of China’s first online game developers.
Snail Mobile launched and immediately took its place as selling prepaid voice and data packages for around $64 a month, where unused data could be carried over and where customers could enjoy zero-rated downloads from the Snail app store. Snail Mobile was offering a level of flexibility and customization its incumbents weren’t.
Much like Consumer Cellular, Snail Mobile quickly decided to bolster its offering through the addition of selling accompanying hardware to customers alongside its connectivity offering. The company bought a 3D gaming smartphone company, where it then started selling and bundling SIM cards and offers with the device.
Snail Mobile also started to target and focus on a specific niche market segment- Chinese tourists flying between China and Europe. The MVNO signed agreements with 20 operators around Europe to make their offering to travelers as compelling and cost-effective as possible.
In a market that has been slow to take-off, this Chinese MVNO has shown how flexibility of plans, a focus on customer niches and creating synergy with other product lines and partners, can lead to a winning strategy.
The Future for MVNOs
The MVNO examples above prove that if you go beyond building a strategy around price, you can find success in the highly competitive MVNO landscape. Companies who prioritize differentiation, strong and logical partnerships, creating a compelling brand identity and marketing strategy, customer-centricity and the customer experience, will be the MVNOs who stand the test of time.
At OXIO, we truly believe that going beyond pricing and creating overall synergy between your mobile connectivity offering and your other products and services, is the secret sauce to a winning MVNO strategy. With the addition of actionable data and insights on subscribers, where you can understand your customers at a deeper level and bolster your marketing campaigns and strategy, you’ll be able to create an MVNO that meets customer needs, delivers unrivaled customer experiences and helps drive success across your entire product and services portfolio.
