The situation, when any large store chain, bank or educational institution has its own small “virtual” telecommunications carrier which will provide content services as well as voice to certain audience— is the distant future in our country. Such conclusion can be made from the research headlined “MVNO in Russia and the world: opportunities and limitations” by Jason’s & Partners, the analytical company.
As judged by analysts’ data, in Russia the MVNO-subscribers base had exceeded 330’000 and appeared as 0,2% of all users of the cellular networks (187,6 millions) by the end of 2008. Companies, developing this projects, were drawing the subscribers quite cautiously, some of them even lazily, to be honest. The champions were those who were developing B2B services with 2-3 times higher ARPU than mid-market one. They include “Allo Incognito”, Matrix and Corpolink. Except these ones there were such prominent players as Gars Telecom, Baza and “Euroset” at the market.
On the 13th of March, 2009 the Ministry of Justice of Russian Federation registered the order of the Telecommucaions and Mass Communications Ministry 29th, December, 2008 № 116 “About requests confirmation to the mobile radio-phone services rendering within mobile virtual network operator”
Thus, MVNO business-model has received the legislative base: the document has determined the terms, which virtual carriers should had observed to operate. In May, 2009 “National Mobile Phone” obtained the first in Russia license and became the first Russian legal virtual carrier, but the volume of its subscriber base is extremely poor. Subsidiary projects of the “Big three” are more active — the subscriber base of these projects has increased nearly twice due to successful projects (“MegaFon-Moscow — 150 thousand subscribers: “Prosto”), and also “A-mobile” (MTS, about 80 thousand clients).
At the moment MVNO are on the first stage of their life cycle — constructing of such systems is cheap enough (the simplest billing software, SIM emitting, plain advertising campaign, outsourced call-center). They stand for fragmental projects, targeted to work with those target groups, which traditional providers are not ready to invest in to draw custom. The virtual carriers provide FMC services as well, because the same “big three” operators don’t have time or don’t care.
Some of the MVNO appear to be projects targeted to the cheap communication not only within the network, but within the tariff. And the main profit is made on the subscribers’ oblivion, who believes that 5 kopecks (as within “Prosto” case) stand for any mobile calls, not only those ones which are connected within the framework of the certain project. As the information issuers of “MegaFon-Moscow” confess, that enables to keep ARPU at 200-250 rubles level even for such “inexpensive” customers.
MVNO business-model legalization, certainly, will serve as a push for the development of this telecom-market segment, but it is hard to believe that a quantity of content-oriented MVNO will appear in our country. The key problem at the moment is the absence of any reasonable system of additional telecommunication services, which could be offered to subscribers. Speaking about corporate clients, FMC projects and Virtual PBX services, that are well-managed by base telecommunication carriers, should be mentioned. There is still no such system for the mass market. However, store chains could use MVNO projects to advertisement broadcasting, discount proposals transmission, customers’ expectations collecting etc; financial and credit institutions could attach mobile banking services (preset for SIM), bank machines searching and mobile payment systems with NFC use to their MVNO; and large educational institutions could imply MVNO-based timetable translation, SMS-notifications about control works and exams delivery, reminders of the new month study maturity date, references to control questions at the University web-site etc. There are plenty of versions, but none of them is used at the Russian market. After all it is hard to believe J’son & Partners, that the MVNO subscriber interest in the total cellular operators base will have reached 2,3% by 2102 in Russia.
In the nearest time about 10 new valuable virtual operators, owning certain licenses, will join the existing pool of MVNO players. There is every likelihood, that these companies will follow MegaFon and MTS in cooperation with low-profit and special subscribers (government, educational and medical institutions).
The special tariff of the MegaFon-Moscow for the “Carrefour” store chain (low cost of the mobile calls within these shopping centers area) obviously will be transformed into MVNO project as well.
Own virtual project probably will be developed by the Russian retailer “X5 Retail Group”, that doesn’t seems to be a surprise in general — the company’s marketing director is the former MTS’ top manager Michael Susov, co-owner of the Effortel company (which is developing some local MVNO projects in Europe quite slowly).
Appearance of the virtual operators in the CDMA2000 networks is also expectable because there are much more perspectives for mobile Internet and voice transmission there than in mass GSM/UMTS networks. Appearance of the virtual operator that will be entirely targeted to internet-services is also as likely as not (there is no problem to produce mobile modems with its own logo and buy internet-traffic from the “Big three” companies in bulk).