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The evolution of Mobile Virtual Network Operators in Spain: trends and current status

By Nae — March 4, 2015

There are 50.8 million cell phone lines in Spain, and the Mobile Virtual Network Operator category holds 16% of the market share.

Proof of the tremendous success of MVNOs is that the top three operators have launched alternative sub-brands that target the low-cost and youth markets.

According to the latest data published by the CNMC (Comisión Nacional de los Mercados y la Competencia, or the National Markets & Competition Commission), there are 50.8 million cell phone lines in Spain, and the Mobile Virtual Network Operator category holds 16% of the market share (8.1 million).

An MVNO is an operator that is not authorized to install antennas. However, just because it cannot install antennas does not mean that it cannot rent the voice and data traffic that passes through them and resell phone services to residents and businesses.

As a result, 15 years ago, the CNMC (which was the CMT at the time) deregulated the market so multiple agents could operate in it. Since then, dozens of operators have appeared and then disappeared in Spain. Some have had relative success, and many others have been unable to succeed, despite being backed by major entities.

Wikipedia currently lists 24 mobile virtual network operators, while other specialized websites list up to 80 (including many that no longer exist). In this article, we will attempt to break down the current situation and the main trends:

Generic brands of network operators

Proof of the tremendous success of MVNOs is that the top three operators have launched alternative sub-brands that target the low-cost and youth markets. For example, Movistar has Tuenti (which is changing from a social network to an operator), Orange has Amena, and Vodafone has recently launched Lowi. They have the advantage of forming part of a large group, which means that they can take advantage of economies of scale and the know-how gained by years of experience.

Telecommunications provider brands

Mobile network operators assist, to a greater or lesser degree, companies that want to launch their own mobile virtual network operator. A special case is KPN, and Nae was strongly involved in its creation and development. This Dutch operator had various telecommunications provider brands in other European countries, and it launched its business in Spain eight years ago. Aside from offering its main brand, Simyo, it also allowed the creation of other third party brands. This resulted in the telecommunications providers Bankinter and Jazztel (now independent), as well as other brands that no longer exist, such as Ortel mobile, Blau, 40 Móvil, Hong Da, and Vueling Móvil. Simyo is now part of Orange, although its sub-brands can still be considered virtual.

Consolidated MVNOs

Jazztel and Ono have millions of Internet and fixed phone users, and in the market that tends to offer the most services to its customers, cell phone services (Triple Play or 3P) and digital television services (Cuadruple Play, or 4P) also play a major role. Although both brands are in the midst of an integration process (with Orange and Vodafone, respectively), they have a great reputation in the market, with one million new subscribers in 2014.

Pepephone began operating as an MVNO within the Vodafone network in 2007, and it is currently migrating its services to Movistar’s infrastructures in order to offer 4G coverage as well. In 2014, it obtained 14,550 new subscribers, and it has based its strategy on word of mouth, simplicity, very low costs, and transparency. Another MVNO to highlight is Más Movil, which had 9,400 new subscribers this past year and is known for riskier advertising campaigns.

Regional

In various parts of Spain, certain telecommunications providers have emerged that only provide service in their region. The two most prominent success cases are Euskaltel in the Basque Country and R in Galicia. Both have more than 200,000 subscribers and high customer satisfaction levels. TeleCable in Asturias also has its own wireless telecommunications provider, and Parlem was recently launched in Catalonia as the tenth attempt to create a Catalonian wireless telecommunications provider.

However, some of these telecommunications providers fall within a category that is a mix of mobile network operator and mobile virtual network operator (such as Yoigo), because in the latest radio electric frequency auction, they obtained packs that would allow them to use their own antennas, while maintaining agreements with mobile network operators.

Geographic

Certain telecommunications providers have decided to target their services at niche groups, such as immigrants. Large brands are usually unable to offer specific offers, so some telecommunications providers have specialized in certain regions, countries, and continents. Examples include Lebara in Southeast Asia, Hong Da in China, and other general alternatives for Europe, Africa, and South America, such as LycaMobile, LlamaYa, Ortel, etc.

The competition is fierce between them, especially with the proliferation of smartphones (and free calls via the Internet), but they still hold modest market shares.

Large brands from other sectors

A trend that we thought would take off, but ultimately never caught on, is the idea of large non-technological corporations offering telecommunications services to their users. This resulted in the creation of wireless telecommunications providers in banks or supermarkets (Bankinter, Carrefour, Día, Eroski), or even in automobile associations like RACC. On the other hand, Cadena 40 and Vueling were unable to materialize, and other projects were never launched, such as the potential telecommunications providers of F.C. Barcelona or Real Madrid, and many other brands that may have considered the idea.

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