Nowadays, technology is advancing by leaps and bounds and is constantly changing. These advances affect all sectors and the telecommunications sector has not been left behind, undergoing a major transformation and giving rise to the Mobile Virtual Network Operators (MVNOs) market.
In this article, we tell you about the entry and current situation of these virtual mobile operators in Latin American countries.
What are MVNOs?
Before starting to see what the MVNO market is like in Latin America, it is important to know a little more about these companies.
MVNOs are telephone companies that do not have their own network and need the infrastructure of large operators to provide their services.
MVNOs have a series of characteristics that make them stand out from traditional telephone operators:
- Service focus: they focus directly on consumers so customer service is more personalized than in large telephone operators.
- Lower prices: since they do not maintain their own infrastructures, prices are lower and they have higher profits since they rent at wholesale cost, which entails fixed costs, a profit margin, and a fixed final price to the public.
- Designed to meet customer needs: unlike the large telephone operators, MVNOs can offer customized plans to meet a specific customer need, while traditional telephone operators have more generic plans to try to serve millions of consumers.
During these years, new trends have emerged that directly affect the MVNO sector:
- Cloud deployment will lead to market share: very few MVNOs have implemented this trend, and many mobile operators are drifting towards a flat network architecture due to the entry of 4G and 5G.
- Digital payments are the future: this trend has gradually become a must-have service, especially in emerging countries, where digital payments produce great opportunities for MVNOs.
- Self-service portals are changing the customer experience: for MVNOs this reduces administrative burdens and results in cost and time savings.
What is the impact of these MVNO trends globally?
These trends create new technological advances that enhance connectivity, control, financial inclusion, etc.
New technologies make it possible for MVNOs to connect millions of people in the mobile market. All this causes a change in business models as it provides new ways to connect, in a secure way, with your employees and customers.
The entry of MVNOs in Latin America
After the pandemic many economic sectors were affected, however, the telecommunications sector and its continuous advances have helped to maintain the economy of many Latin American countries such as Colombia and Chile.
MVNOs had to take certain risks in order not to become just another connectivity provider, for this reason, the creation of new products, strategies, and business models were fundamental pillars for MVNOs to succeed in Latin America.
The introduction of MVNOs in Latin America was a slow process since in those countries the penetration of traditional mobile telephony is very high, in countries such as Argentina, Uruguay, and Venezuela the penetration level of these operators is 100% and in the case of Brazil, it is 90%. The main challenge for MVNOs was increasing their mobile market share.
The entry of MVNOs in these countries was born due to the saturation of the large telephone operators, which caused certain market niches to be dissatisfied with the service they received from these operators, therefore, the introduction of MVNOs was aimed mainly at these market niches and in this way to obtain personalized attention and improve the level of satisfaction of these customers.
In the case of Colombia, through the entry of MVNOs, they sought to enhance the mobile telephony service through the implementation of new business models.
According to the latest report of the CRC (communications regulation commission), the MVNO market in Colombia represents 3.2% of the mobile Internet sector and 6.3% of mobile telephony.
According to an article published in Expansión, the MVNO market in Mexico has increased its share from 1.9% in 2020 to 5.1% in 2021 and according to several experts this sector will continue to grow to increase by 20% in the next five years.
Today the number of MVNOs in countries such as Brazil, Mexico, Colombia and Chile has increased considerably in recent years. Mexico and Brazil are the countries with the greatest activity in this sector, with Chile and Colombia in second place.
Regulatory requirements to be met by MVNOs
Following the entry of MVNOs, the last few years have seen the creation of regulatory policies required of these virtual mobile operators.
Each country requires its own regulatory policies, in the case of Colombia, MVNOs are considered Telecommunication Network and Service Providers, these must comply with the laws imposed by the State through resolution 5050 of 2016.
Among their obligations, they have the responsibility to comply with the general qualification regime as a provider of telecommunications networks and services, and they must also abide by the regime for the protection of consumers and users of telecommunications services.
The entry of MVNOs in Chile has caused users to freely choose which telecommunications company they want to belong to according to their needs.
The National Automatic Roaming Law allows MVNOs to present their services covering new consumer niches that are currently not being served and do not satisfy their needs with the large mobile operators.
Services for MVNOs in CENTUM Digital
In CENTUM we are aware of the needs that MVNOs require, these virtual mobile operators are a business model that requires changes and flexible solutions, and for that reason CENTUM Digital presents OPP, a service for the automation of the APN.