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

22 Jun 2015

Colombia’s Comision de Regulacion de Comunicaciones (CRC) has launched a consultation regarding the streamlining of the regulatory processes affecting new mobile virtual network operators (MVNOs) in the country. Issues under discussion include the promotion of new market entrants, number resource management and quality of service (QoS). Comments are welcome until 3 July 2015. As of 31 December 2014 Colombia’s MVNO sector accounted for a total of 2.884 million subscribers, giving it the largest virtual operator market in Latin America by some distance. At the same date Virgin Mobile dominated the sector, with a user base of 1.991 million, up from 440,667 one year earlier.

Chilean business daily Diario Financiero writes that recently launched MVNO Simple Mobile hopes to extend its business model to Colombia and Mexico, with general manager Victor Fernandez telling the paper: ‘The idea is to replicate this scheme in every country … We are open to sign with any operator whose conditions seem to us desirable.’ The start-up, which is managed by three ex-Movistar Chileexecutives, aims to provide end-users with a range of ‘simple’ flat-rate tariffs, via the network belonging to their former employer. Fernandez noted that Simple has set a modest subscriber target of 20,000 by end-2015.

Also in Latin America, Mexican telco Maxcom has announced the signing of a new wholesale deal with America Movil (AM)-backed Telcel. Maxcom expects the MVNO to launch in 2016 and hopes to secure two million users within five years of its launch. The contract represents its second such deal; Maxcom has offered services over Movistar’s network since September 2007, but claimed just 28,238 users at the start of this year.

Elsewhere, Israel’s Pelephone Communications is in negotiations to acquire struggling wireless reseller YouPhone from local company Alon Blue Square. According to Israeli publication Globes, YouPhone currently has around 80,000 MVNO subscribers connected via Pelephone’s network, but has struggled to gain traction with its business model, which gives subscribers discounts when buying goods from its sister companies, Alon Israel Oil Company and the Mega Retail supermarket chain. TeleGeography notes that YouPhone entered into a network hosting agreement with Pelephone on 1 January 2014, superseding its previous contract with Partner Communications.

Albafone, Macedonia’s sole active MVNO, has confirmed that it ceased operations as of 16 June. In an announcement on its Facebook page, the virtual operator noted that customers affected by the decision can port their numbers to host operator ONE free of charge, while those wishing to migrate to T-Mobile or Mobilkom will have to pay MKD239 (USD4.4) to do so. According to local press reports, Albafone was heavily indebted to ONE at the time of its closure. The MVNO was aimed at Macedonian citizens of Albanian ethnic origin.

US MVNO FreedomPop has confirmed that it has declined multiple takeover offers, but raised USD30 million in new funding, and will continue expanding domestically and internationally. FreedomPop CEO Stephen Stokols told Fierce Wireless that the company’s Series B funding round was led by Partech Ventures, with existing investors DCM Capital and Mangrove Capital also participating. Stokols noted that the decision not to sell the company was two-pronged; firstly, the company is starting to gain serious traction terms of subscribers and revenues; and secondly, it is reluctant to lose control over its strategy and direction if it is acquired. Going forward, Stokols said that in 2016 the company will add another US carrier partner to augment its existing wholesale deal with Sprint Corp.

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Albafone, Alon Cellular (YouPhone), Comision de Regulacion de Comunicaciones (CRC), FreedomPop, Maxcom, ONE (incl. on.net and Cosmofon), Pelephone, Radiomovil Dipsa (Telcel), Simple