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Sunday 30 January 2011

Telecommunications

MVNOs to come onboard in 2011, former communications minister says – Brazil


Published: Thursday, January 20, 2011 10:11 (GMT -0400)
Brazil could see a rise in mobile virtual network operators (MVNOs) throughout 2011, with airlines, supermarkets and sports associations potentially entering the mobile phone arena, former communications minister Juarez Quadros do Nascimento told BNamericas.

After a year of deliberation, telecom regulator Anatel approved in December 2010 "flexible rules" that allow the industry to self-police on the issue of MVNOs, said Nascimento, now a partner at Brazilian consultancy Orion Consultores Associados.

MVNOs essentially lease spectrum from licensed mobile operators to provide service. After arising with the 1999 launch of Virgin Mobile in the UK, MVNOs spread to other countries from the US to India. Of the 602 MVNOs active globally at end-1Q10, 65% operated in Europe, according to consultancy Wireless Intelligence.

"The reasons for failure or success globally are distinct and depend on specifics, since MVNOs focus marketing activities on clients already within their portfolio, taking advantage of their brands and existing relationships, instead of new consumers," he said. "In Brazil, corporations with successful brands ... can be niches for MVNOs."

Nascimento mentioned airlines Gol and TAM, as well as supermarket chains Carrefour, Extra and Pao de Acucar, as potential MVNO targets. The market could ultimately yield 9.5mn clients and 1.8bn reais (US$1.08bn) in the next five years, he noted, citing a study from consultancy Signals Telecom Consulting.

"Certainly, MVNOs will be an opportunity for national carriers ceding their networks, and new virtual operators targeting specific niches," Nascimento said.

With respect to Nextel, the former minister said MVNO partners could play part of the company's business strategy as it prepares to enter the 3G market this year.

"The new mobile operator is seeking to differentiate itself in the market and win over customers from other operators, since service penetration is already very high," he said.

The success of MVNOs in Brazil could determine the sector's future in the region, Nascimento added.

"Brazil, with somewhere around 200mn cell phones at the end of 2010 and explosive demand for broadband, [and] 3G networks in more than 1,300 cities, is surely a ramp up to launching MNVOs in other Latin American countries," he said.

MVNOs to come onboard in 2011, former communications minister says - Brazil
Published: Thursday, January 20, 2011 10:11 (GMT -0400)