Asia’s MVNOs need an international roaming plan to survive

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Despite robust subscriber growth, Asia’s MVNOs are facing an ARPU crisis and must offer a global footprint to be profitable – and survive.

On the face of it, the segment is doing well with 137 players as of 2015, the second largest region in the world after Europe. Subscriber numbers are growing – GlobalData expects the MVNO share of Asian mobile subscriptions to rise considerably from 0.7% in 2016 to 5.5% by end of 2021, mainly driven by growth in China, Myanmar, Malaysia and the Philippines. 

However, dig a little deeper and the picture changes – MVNO users typically have ARPUs that are much lower than their MNO counterparts. For example, China’s MVNO subscribers have marginal usage profiles, low spend and negligible data use, resulting in ARPUs that are a startling 75-80% lower than the country’s three MNOs.

Current players need to strengthen their offering to retain and attract customers, and make them more profitable. And the opportunity lies beyond their borders.

Think globally

Asia’s affluent and mobile-savvy consumers lead the world in terms of outbound travel. And they increasingly expect to take their mobile lifestyles with them wherever they go, whether to complete that Instagram story or to check that important e-mail. By offering roaming services to their consumers, MVNOs can improve revenues, profitability and customer loyalty. The potential is huge – globally, Juniper Research estimates that the roaming market could be worth almost $90 billion by 2018. Data roaming in particular grew by 630% between 2005 and 2015, and shows no sign of slowing.

It’s not just consumers that roam: Asia’s fast-growing Internet of Things will spur exponential growth in data roaming over the next decade. The Asia Pacific region is rapidly becoming the world’s most advanced region in machine-to-machine connectivity, with an estimated 8.6 billion connected devices by 2020 – 30% of the world’s total. The coming months and years will see the region’s enterprises demanding that its MNOs and MVNOs provide the seamless global connectivity that IoT needs.

However, despite the lucrative revenue and profit opportunity, Asian MVNOs have been slow to offer seamless global roaming. The reason: it is logistically challenging to establish the international footprint needed to provide subscribers with a seamless global service – a process that can take many months, if not years.

International connectivity for voice, SMS and data is built upon a network of agreements with international operators ranging from signalling to data connections. Managing and maintaining these connections, monitoring regulatory developments overseas, big-data analytics of usage patterns and more – all need teams of qualified technical staff and specialist equipment. To interconnect with other global networks a full suite of tools, agreements and network connections has to be established. Additionally, the lack of a core physical network is an obstacle to creating a global network presence with voice, data and messaging services.

This is why international MVNOs – i.e. those that target roamers and thus operate across multiple markets – make up only 10% of global MVNOs. 


Asian MVNOs need to think out of the box when it comes to roaming – and in fact, innovative MVNOs are already doing so. One option is to adopt roaming-as-a-service from specialist international network operators who already have relationships with operators in almost every market in the world. Using dual IMSI SIMs, MVNOs can piggyback on the extended networks and pre-existing operator relationships of roaming specialists to establish immediate international connectivity – thus achieving international visibility and roaming coverage without hundreds of cumbersome bilateral relationships, or the tools and network connections needed to maintain them.

The other advantage of using hosted roaming is that the platform is futureproof, and will evolve to support LTE as well as M2M roaming without the need to invest in network upgrades.

Looking to Europe, the world’s most advanced MVNO market, for instance, one can see examples of successful MVNOs that have adopted one-stop, modular solutions with global mobile services providers to roll out international roaming in a matter of just days and weeks. Using a hosted model, these one-stop roaming solutions offer a plug and play, scale-as-you-grow deployment that cuts deployment timeframes and capital expenses.

With already-fierce competition getting more intense with digital service providers, handset manufacturers and more, the Asia Pacific MVNO market will see consolidation very soon. Only players with sticky, full-service global offerings will survive in the long term. And the time to start preparing is now.

Written by Malcolm Chan, managing director of Asia-Pacific at BICS

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