In June J’son&Partners published the results of the first research of Russian MVNO market, made after real legalization of MVNO status.
The report was prepared on the basis of information received from the virtual operators themselves and from the open sources as well. J&P analysts considered that the famous order of Ministry of Communications № 116 d/d December, 29, 2008, set the requirements to the mobile communication rendering under MVNO business model, had played the positive role in this market segment development. Within last 6-8 months in the country several ambitious MVNO-projects have started, which outperforms all previously existed virtual mobile networks regarding the dynamics of connections. According the research authors’ forecasts, by 2012 the share of MVNO subscribers in the total subscribers base of national cellular companies would reach 2,3%, when by the end of the last year it had been only 0,2%.
The First experiments
As it follows from the given data, independent experts are drawing the bright-colored future of the new-born market. There is a number of serious arguments in favor of optimistic point of view. For example, league of the mobile “virtuals” had rather good start conditions. In fact, MVNO business in Russia traces its history to 1999, when “VimpelCom” transferred its DAMPS network to “Corbina Telecom’s” use. In the mid 2000 the companies, offering cheap roaming or flexible call addressing between land and mobile networks that could provide total telecommunication cost decrease, on the basis of their SIM-cards, appeared one by one. And by the end of 2008 the total subscriber base of the virtual mobile operators counted 330 thousand users, though the participants of the mobile communications market didn’t make serious efforts to develop certain activity.
Upon J&P, the leaders of so-called experimental MVNO-projects (companies. working under MVNO-model without a license) were “Allo Incognito”, Matrix and Corpolink. Gars Telecom stayed a little behind, and as the real outsiders J&P have named such projects as “Baza”, “Euroset”, “Yo” and “Alternativa”. It is worthy to note that the “National mobile phone” wasn’t examined in the research, but this company is the one that started the modern age of virtual mobile communication. This carrier was registered in 2005, and in may 2009 got the first Roscomnadzor license for operation as MVNO in Moscow, Moscow region and 15 territorial subjects of Russian Federation. “National Mobile Phone” affirms that it is going to use networks of two standards, IMT-MC-2000 (SkyLink) and GSM (Smarts), but it hasn’t set about commerce activity yet.
ComNews Research agency’s expert conclusions are a little different. Upon its estimations, in the end of last year Matrix with 75 thousand active subscribers was the leader of the market. It was nearly twice ahead its closest chaser — CountryCom. Though, there is no sense in arguing whose 8 months-old data is more real. The new stars have appeared in the sky — mass market oriented “A-Mobile” and “Simply for communication”, which according to their achievements have already blinded previous participants of virtual mobile communications market.
“A-Mobile” is the common “child” of MTS and the French hypermarket “Auchan”. Since April this project has been working in the whole country, where “Auchan” had reached. Irina Osadchaya, spokeswoman of MTS, has underlined, that the “A-mobile” project realization had met the mobile carrier’s expectations. They sell several times more subscriber packs than in simple telecommunication shop, and the subscribers’ activity is 100%. In other words, everyone connected within “A-Mobile” tariff stays with this tariff, fulfilling MTS users’ lines. By the end of the current year MTS is going to connect about 100 thousand “A-Mobile” subscribers, though the tariff change from other tariff plans for this one is not contemplated. By the way, J&P even in May counted, that the joint offer MTS and “Auchan” had been used by 70 thousand people.
MVNO-project unfolded within the “MegaFon” base network under “Simply for communication” brand is forming the subscriber base more rapidly. By the end of May, 2009, the number of subscribers has over passed 100 thousand ones, and the brand promotion was encouraged by active TV and outdoors advertisement. By the end of 2010 the authors of the project hope to attract 1 mln subscribers, and in the long-term perspective — 5% of all mobile communications users in Moscow region. Total investments in this MVNO business, including advertisement expenses, amounted to 200 mln rubles.
The hallmarks of the proposals under these both MVNO-projects are their extremely low cost on calls between the subscribers of this tariff plan and competitive price on the calls out of the group. Upon the “Simply for communications” tariff rate, 1 min call and one SMS transfer within the group is 5 cop. The calls to any local or mobile numbers of the Moscow region carriers will cost more familiar 2,5 rub/min.
If when launching the project such prices could be called revolutionary, then they were nearly caught by ubiquitous “Beeline” by launching teenage tariff plan “Communication Monster”. But upon this tariff plan the cost of the first minute of a call within the group is 2,5 rub., but from the second minute the cost of the calls to the external subscribers drops to 1,5 rub. In the other “Beeline’s” tariff rate, addressed to a business customer (“Colleagues”), the calls between the numbers under one corporate agreement will cost 13 cop./min. The suggestion can be made: speaking about servicing of one large enterprise with hundred thousands subscribers in the one region, it may get really lower prices for communications from the carrier. Obviously, 5 cop per minute is not a limit.
“A-Mobile” tariff plan’s parameters are not outperformed till now. The first 15 minutes within a group of these tariff subscribers are free; starting from the 16th minute a subscriber pays 90 cop per minute. Average cost for calls to all mobile operators of Moscow region numbers is 3 rub./min. MTS Press center doesn’t specify ARPU of its MVNO projects, but confirms that collaboration with “Auchan” means first а all a new distribution channel. After breakdown with Euroset, MTS, the largest mobile retailer had to close the appeared gap somehow. And the hypermarkets network “Auchan” with its stream of able to pay customers copes with this task brightly.
Partner business with “Auchan” can be called etalon project, implying “Retail MVNO” project, — Irina Osadchaya concludes. Our experience shows the project is going to be successful, when circumspect “niche” proposal meeting the core audience needs is realized. In “A-mobile” case it is a tariff plan, oriented to the persons with an average income, who choose quality at “peoples” prices.
Such high estimation of MVNO-project is likely to be trusted in. MTS, previously the main foe of providing its own network resources to the “virtuals”, now is actively replicating positive experience of cooperation with retail companies. Information, that the operator has practically agreed upon the similar project launching with X5 trade group, where MTS CMO and one of European MVNO Effortel founder Mikhail Susov had come as top-manager got leaked to the press. After all, connection to the MTS network at an “Econom” tariff are made within retail chain “Assortie” in Komi Republic.