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U.S. MVNO Market Continues To Grow, But Changes Are On The Way, New Study Finds

Increased competition from bigger players will make the MVNO market tougher for smaller operators, according to a new report fro

NEW YORK, June 13 /PRNewswire/ -- Mobile virtual network operators (MVNOs) are poised to capture more market share from U.S. wireless service providers in coming months, but the long-term success of many MVNOs is far from assured, according to a new study released today by Heavy Reading (, Light Reading Inc.'s market research division.

MVNO Marketing Outlook 2005 analyzes current and anticipated market conditions for MVNOs in North America and evaluates how the relationship between MVNOs and conventional mobile network operators is likely to develop in coming months. The report covers 22 companies now offering MVNO services in the U.S. and Canada, including major players Virgin Mobile USA, retailer 7-Eleven, and Qwest Wireless, the MVNO service offered by Bell company Qwest Communications International .

The report, authored by Global Advertising Strategies Inc., also analyzes the competitive positioning of major U.S. wireless operators relative to the MVNO market. Carriers covered include Cingular Wireless (the joint venture of BellSouth and SBC Communications), Sprint , and Verizon Wireless .

"U.S.-based MVNOs are well positioned to gain market share as consolidation reduces the number of conventional wireless operators," the report notes, adding that the number of companies offering MVNO services is likely to soar in the next 12 months. "As the MVNO field gets more crowded, the first-mover advantage with specific demographic groups is likely to dissipate. This will make it difficult for smaller MVNOs to compete with newcomers that may have more recognizable brands, particularly emerging competitors from the retail and entertainment industries."

Other key findings from MVNO Marketing Outlook 2005 include the following:

U.S.-based MVNOs are well positioned to gain market share as consolidation reduces the number of conventional wireless operators. The acquisition of AT&T Wireless by Cingular, the pending merger of Sprint PCS and Nextel, and Alltel's pending acquisition of Western Wireless will reduce the number of carriers serving 4 million or more customers from eight to five. Having fewer conventional operators should make it easier for MVNOs to establish brand awareness in their target customer segments.

Competition among the big five wireless carriers for MVNO wholesale minutes should be favorable to the MVNO model. Carriers such as Cingular and Sprint have been aggressive in forging wholesaler relationships with MVNOs. Despite consolidation among facilities-based wireless operators, the need for those operators to bolster their network utilization and revenues through wholesale agreements should give MVNOs enough leverage to bargain for favorable pricing for the foreseeable future.

MVNO success will hinge on the ability to market effectively to niche audiences. North American MVNOs are specifically targeting consumers with poor credit, users of international long distance, and young people. Key niche markets -- covering demographics previously considered undesirable by wireless carriers due to their low credit characteristics and exotic usage profiles - are going to attract a lot of attention this year.

MVNO Marketing Outlook 2005, a 24-page report, costs $3,495 and is published in PDF format. The price includes an enterprise license covering all of the employees at the purchaser's company.

For more information, or to request a free executive summary, contact: Dave Williams Sales Director, Heavy Reading 415-321-3750, ext. 30 [email protected] Press/analyst contact: Dennis Mendyk Managing Director, Heavy Reading 201-587-2154 [email protected] About Heavy Reading

Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next- generation hardware and software.

Heavy Reading

CONTACT: Dave Williams, Sales Director, +1-415-321-3750, ext. 30,
[email protected], or Press/analyst contact, Dennis Mendyk
Managing Director, +1-201-587-2154, [email protected], both of Heavy

Web site:

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