Wednesday, March 08, 2006

Pyramid Research: MVNE Recurring Revenue Opportunity could exceed $850m by 2010

According to Pyramid Research, "the mobile virtual network operator (MVNO) business has translated to more than $400m in recurring revenues for mobile virtual network enablers (MVNEs) in Western Europe and the US." Pyramid predicts "MVNE recurring revenues to exceed $850m by 2010 in these markets and pre-launch investments will contribute a 20-30% upside to this total."

Pyramid Research wirtes that "the key driver of the MVNE model is the leveraging of assets across their customer base to lower costs." Guy Zibi at Pyramid Research said, "Along with the MVNO model, the MVNE model is evolving from pure outsourcing to more of a venture capital model."

Pyramid concludes that "MVNEs with demonstrable expertise and unique platforms will stay, however those that are merely intermediaries are in a more vulnerable position. This is why MVNEs will increasingly look into building partnerships and move towards the venture capital model—they are less vulnerable to being dismissed at the end of the contract."