MVNO Monday: a guide to the week's virtual operator developments

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2 Feb 2015

UK pay-TV/broadband provider British Sky Broadcasting (BSkyB) has announced that it has signed a mobile virtual network operator (MVNO) agreement with Telefonica UK, which operates under the O2 brand. Under the terms of the multi-year deal, Telefonica will give Sky wholesale access to 2G, 3G and 4G services over its nationwide network. For its part, Sky plans to introduce mobile telephony services to end-users in 2016. In related news, sister company Sky Deutschland – in which parent Sky PLC raised its stake to 95.80% last month – is said to be in MVNO talks with a number of German mobile network operators, although its overtures have been met with a lukewarm response to date, with Sky considered a major threat to the status quo.

Elsewhere in the UK, it has been revealed that BT Group intends to press ahead with its previously stated MVNO launch, targeting businesses and consumers, regardless of the outcome of its takeover talks with mobile market leader EE. BT initially planned to offer services using a hybrid network comprising an MVNO partnership with EE and BT’s Wi-Fi network. The programme was called in to question however, when reports emerged in October suggesting that the telco was struggling with the technology that would facilitate a seamless connection between wireless and cellular networks. The launch was originally earmarked to take place in April 2015, and CEO Gavin Patterson admitted last week: ‘We are making good progress on our due diligence in relation to a possible acquisition of EE and will make further announcements in due course. In the meantime, our consumer mobile launch plans remain on track.’

Brazilian telecoms watchdog Anatel has granted an MVNO licence to a company linked to Brazilian evangelical church Assembleia de Deus, BNAmericas reports, citing the country’s federal gazette. The organisation is the largest evangelical denomination in Brazil, with an estimated 20 million members. The MVNO licence has been awarded to an affiliate company called Alo Servicos. Meanwhile, the same news site reports that Brazilian postal service operator Correios is reconsidering its MVNO options after Italian partner Poste Italiane dropped out of the joint venture. Poste Italiane is Italy’s largest MVNO by subscribers, having launched its own service back in 2007.

TracFone, the largest MVNO in the US by subscribers, has agreed to pay USD40 million to the Federal Trade Commission (FTC) to settle charges that it deceived millions of consumers with ‘hollow promises’ of unlimited data. The FTC’s complaint against TracFone alleges that since 2009, the MVNO has advertised pre-paid monthly mobile plans for about USD45 per month with ‘unlimited’ data under various brands, including Straight Talk, Net10, Simple Mobile and Telcel America. However, despite emphasising unlimited data in its advertisements, TracFone drastically slowed or cut off consumers’ mobile data after they used more than certain fixed limits in a 30-day period.

The number of MVNO subscribers in South Korea reached 4.584 million at 31 December 2014, the Ministry of Science, ICT and Future Planning (MSIP) has confirmed. The figure represents an 84.5% increase year-on-year, from 2.485 million at end-2012. The bulk of the connections are carried over the network of SK Telecom (2.141 million), with 2.079 million using KT Corp’s network. The remaining 363,710 virtual users piggybacked on the LG Uplus network.

According to an unconfirmed report by AsiaOTT, Snail Mobile, China’s largest MVNO by subscribers, has passed the one million user mark. Snail Mobile, the wireless business of video game company Snail Games, previously claimed 670,000 customers at end-2014.

Tesco Mobile Ireland has indicated that its customer base rose by more than 40% in 2014, reaching 300,000 by year-end, and consolidating its position as the country’s leading MVNO. According to the Irish Times, phone retailer Carphone Warehouse, cableco UPC Ireland and broadcaster Setanta Sports all expect to launch MVNOs in the coming months.

Finally, Ghana’s National Communications Authority (NCA) has issued a request for applications for three new telecoms licences, including an MVNO concession, which is priced at GHS1.2 million (USD351,906) and valid for a five-year period. Licence applicants are required to be at least 70% Ghanaian-owned, and must be registered under the Ghana Companies Code of 1963, Act 179. Applications must be accompanied by a non-refundable deposit of GHS150,000.

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