9 reason the UK is the best market for new MVNOs

Global brands are realising that the MVNO model can drive core business growth and be used to reward customers. This is now a fact accepted by the MVNO community worldwide.

There’s no doubt that MVNOs offer a brilliant way to reach customers, and household names are leading the way. Telecoms has become the ‘go-to’ for any brand that wants to create a new revenue stream or give existing customers a new benefit and reason to spend money with the core business. 

And it’s happening at scale and pace. Lidl plans entry to the market in 30 territories, and the likes of Revolut, Klarna, N26, Media Markt are deliberately placing their bets on this strategy, with good reason too. It’s expected the overall global MVNO market will grow to 155Billion USD in 2031, according to Prescient & Strategic Intelligence.

If you want a slice of this, then I personally think you should look at the UK first and foremost. 

Not just because it’s my home country, but because it’s a market where the levers for success are proven, bringing more certainty to a successful and strategic outcome. 

There are nine attributes that the UK has that few other territories can boast. 

1. Maturity: The UK is the home of the very first MVNO, Virgin Mobile on 11 November 1999. I still remember where I was when it was announced. It was a daring and exciting move. 

27 years on, and the market has matured beyond expectation all those years ago. The diversity and innovation that continue to propel the market are important signals that the MVNX ecosystem in the UK is better developed than most. 

We also have a whole generation of customers who have grown up understanding that there is an alternative to the main MNOs. That is especially important if you’re a brand that couldn’t be further from telecoms, like a sports club with a big fan base, or a charity with a loyal base of donors. 

• Regulation: From a regulatory perspective, the UK is very MVNO friendly. Firstly, new entrants don’t need to apply and pay for an MVNO licence, because there are no licences, which by virtue means there’s no limitation to the number of MVNOs that can be in market 

Secondly, the UK is light-touch on red tape. There are no extreme government checks or legal hoops to jump through. This makes for low-cost entry compared to other places in the world.

Put simply, if you can secure an MVNO wholesale deal and adhere to the regulator’s general conditions of supplying telecoms services, then you can launch an MVNO.

• Frictionless journeys: In many countries, applicants for a telecoms service must undertake Know Your Customer (KYC) identity checks before provisioning a service. Typically, this includes providing your national identity card number and various other forms of ID. This adds complexity to joining journeys for customers. Happily there’s no such ID scheme in the UK so the problem goes away. 

Not only that, but in the UK, ID checks are not mandated, and so a more relaxed approach to regulation makes it much easier to enroll customers. 

MVNOs can choose to do credit checks if they plan to bill in arrears or supply a handset, but in the case of prepaid and subscription services, KYC isn’t a requirement. This reduces friction in joining journeys and makes for a far simpler app, web or retail experience.

• Mandated wholesale access: When the Vodafone and Three networks merged, the Competition and Markets Authority (CMA) placed binding provisions on the new company to provide regulated wholesale access. This was a response to the reduction in MNOs from four to three, and therefore the reduction in choice MVNOs have for a wholesale partner.

Before the merger, MNOs were free to decide their wholesale pricing and whether to grant access. However, for a period limited to three years, VodafoneThree must give an MVNO sight, under NDA, of a regulated wholesale commercial reference offer (WRO) to anyone applying.

Now that doesn’t mean the market has become a ‘free for all’ where anyone can join, but it has reduced barriers in the short term. And that’s a critical point to grasp for any brand considering entry. By taking advantage of the Wholesale Reference Offer mandate now you could get to market faster. 

• Vibrant MVNx market: Not only are there three MNOs, all of whom have a wholesale strategy in place, but there is also a vibrant local market of MVNAs or Mobile Virtual Network Aggregators, and MVNEs or Mobile Virtual Network Enablers. 

This means there are more hosting options for MVNOs. The aggregators in particular are competing to grow their market share so have some competitive offers to entice new MVNOs. Not only that, the aggregators also have a more ‘productised’ approach to launching MVN:s compared to MNOs, meaning that smaller MVNOs can find a route to market more quickly and easily.

• Consumers are MVNO ready: The near 30-year history of MVNOs means that UK consumers are very happy to consider and buy MVNO products. In fact, many don’t even know they are using an MVNO, such is the brand-pull. Indeed, some of the UK’s biggest mobile brands are pioneers in legitimising MVNOs in place of network operators. 

The British love a plucky underdog too, so MVNOs that are taking on the establishment always get kudos. Look at brands like Honest Mobile as proof of this.

• Market growth: Don’t get me wrong, joining the UK market is not a walk in the park. It’s a constant battle to compete for share and margin. But despite this, MVNOs are still forecast to increase market share, as FDM CCS Insight recently emphasised when it said that the UK market will grow from 23% MVNO penetration to 30% by 2031. Remarkably that’s in a market of over 85m mobile connections.

To illustrate the gulf between MVNOs and MNOs, you just need to look at a recent Which? survey with 5000 consumers in which Tesco Mobile was rated at 81% for satisfaction, in contrast to O2 at 67%. Even more telling is that Tesco Mobile, Asda Mobile, iD Mobile and Sky Mobile all score higher than their hosts. 

• Breadth of verticals: Growth comes from just about every vertical in the UK including sports brands, digital-first companies, utilities, financial services and retail. Success is not exclusive to consumer segments either, with plenty of buoyancy in the enterprise, IoT/ M2M arenas. All these verticals prove it’s possible to launch, refine, improve, and grow when you have the right mix of ingredients. 

Let’s not be naive to think every launch succeeds but when you understand the dynamics and lean into the market conditions to build the right proposition, service model and leadership team, then there is certainly every opportunity for a challenger vertical to succeed. 

The nine points above make the UK market the best to use as a test ground before moving into other markets around the world. I know because we’ve helped UK MVNOs take proven concepts worldwide.

Our team of UK and global experts help brands navigate market dynamics, launch and sustain brands in the UK and then take them to a global stage. Those brands might be in the UK, or on the other side of the world, but every single one is given the strategic advice they need to succeed here and stretch to other countries. 

So, no matter if you are a local or international brand pondering a UK / multi-market MVNO launch, then talk to us. We’ll help you design a strategy, from commercial deals to technical infrastructure, that delivers sustained results.  Want to find out more, book a call now.

p.s. Maybe that is the tenth reason why you should choose the UK market!