IMPACTS OF MVNOs ON MOBILE DATA SERVICE MARKET

The intension of the European regulatory framework is to increase competition and consumer welfare on the European communications markets. Competition is also seen as a driver for increased innovation. Accordingly to the objectives, competition increased on the mobile operator markets where the framework has been implemented in action, e.g. Finland and Denmark. The amount of the players on the mobile service operator market increased and the prices of the basic products, voice and short messages, fell. However, innovation or launch of new services didn’t increase during the fierce price competition. In opposite, the competition was only based on price. This raises the question whether new mobile virtual network operators (MVNOs) can affect mobile data service usage? Is this effect positive, negative, or both from different market participants’ viewpoints? This paper researches the impacts of MVNOs on the Finnish mobile data service market. The study is conducted by using theme and structured expert interviews as the research method. It is found that the arrival of new MVNOs has slowed down the development of the data market but not spoilt the business opportunity and investments on the field. Contractual issues caused by increased amount of MVNOs co-operating with both content providers (CP) and mobile network operators can create problems in data service provision thus delaying or even preventing some mobile data service launch or its delivery to the potential customers. On the other hand, the presence of a certain MVNO may enable operations for new types of CPs. MVNOs can best contribute to the mobile data market by offering different types of niche services and service bundles. It would be the most worthwhile to focus on such groups the potential MVNOs already have good relationships with but that are too small-scale for the incumbent mobile service operators (MSOs) to confront the particular needs. These services could include e.g. WLAN services, business solutions or regional services combined with 2G/3G cellular access. In this ‘multi-channel’ approach the MVNOs are seen to bring the most value to the mobile data market.