Latin American MVNO Revenues to Exceed $140 Million by 2015

MVNOs in Latin America are expected to generate revenues in excess of US$140 million by 2015, with Colombia and Venezuela leading the region, reports Signals Telecom Consulting. The experience gained by UNE Movil positions Colombia among the markets with the most experience in the Andean region, in addition to Ecuador.

"The alliance between UNE Telecomunicaciones and Tigo has enabled the fixed line operator to deploy services such as MVNO. This offering, added to the raising of the limit on spectrum capacity, creates a scenario that could become more attractive if there were to be regulations strengthening the status of MVNOs, with the regulator setting rules for their spectrum sales and minute wholesaling, differentiating them from existing resellers," explained Elias Vicente, Senior Analyst of Signals Telecom Consulting.

The report highlights the fact that although Venezuela has had two MVNO experiences, Millicom and Diemo, both were flawed for different reasons. "Virtual operation deployment potential is determined by the legal and political framework provided by the Venezuelan State, particularly as regards the possibility of foreign investment, and in the case of mobile services, the taxes on handset imports. The market does however offer opportunities for the Pay TV operators Inter, DirecTV and Net Uno, the leading candidates to enter the market based on the requirement for replicability of offering. In this scenario, the main impediment to the proliferation of mobile operators lies in the interest of the three existing operators in leasing capacity to new players," added Vicente.

Inclusion of value added services, service bundling and coverage extension are the main drivers behind the development of MVNOs in Andean markets. "It is no coincidence that the rise of Alegro GSM and UNE Movil should have taken place in response to the need by operators leasing capacity to speed the introduction to the market of a mobile service offering. In the case of Ecuador, Alegro GSM employs the Movistar network so that it can finally have a service offering with a nationwide presence. UNE Movil was created partly because of the interest by UNE Telecomunicaciones in offering 4Play packages that include mobile telephony, while its wireless Internet access offering via Tigo's UMTS/HSPA network is a response to the total failure of the operators' WiMAX strategy," concluded Jose F. Otero, President of Signals Telecom Consulting.