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

14 Mar 2016

UK supermarket giant Tesco is planning to take advantage of the fallout from CK Hutchison’s GBP10.25 billion (USD14.58 billion) takeover of O2 UK by purchasing the 50% stake in Tesco Mobile that it does not already own. The supermarket, which has had a 50:50 joint venture with O2 since 2003, signalled its intentions at a closed Brussels competition hearing last week, according to one report in the Daily Telegraph. If successful, Tesco aims to secure a long term deal with CK Hutchison for capacity on the merged Three UK and O2 networks. The plan represents a major strategic shift by the supermarket chain, which last year explored a sale of Tesco Mobile. It is understood that Hutchison is likely to welcome a sale of O2’s stake in Tesco Mobile, as the Hong Kong conglomerate believes it would help convince competition watchdogs to approve its own takeover. According to TeleGeography’s GlobalComms Database Tesco Mobile launched commercial services in September 2003, and ranked as the UK’s largest MVNO by subscribers at end-December 2015.

In a separate but related development, the Daily Telegraph has reported that Liberty Global-owned cableco Virgin Media, which operates as an MVNO under the Virgin Mobile brand, is seeking to use the planned merger of Three and O2 to acquire its own mobile masts and radio spectrum. Citing sources with knowledge of the summit in Brussels, the UK broadsheet reports that Virgin is ready to create a new fourth mobile network operator (MNO) if the regulatory authorities force the pair to sell off assets once they have merged. As such, Hutchison is said to be prepared to divest O2’s masts and a small chunk of spectrum to push the deal through, but has suggested that any would-be operator would still face a heavy investment in order to compete. TeleGeography notes that Virgin Mobile launched in November 1999 and claimed 3.016 million subscribers at end-2015, making it the UK’s second largest MVNO by subscribers at that date.

In the US, Life Wireless has announced that it had reached the one million subscriber milestone, with company president William Curry commenting: ‘This milestone is a testament to our commitment to service, rigour in our processes, and strength of our business practices’. Launched in October 2010 over the AT&T Mobility network, Life Wireless is now available in 27 US states, as well as the unincorporated territories of Puerto Rico and the US Virgin Islands (USVI). To obtain a Life Wireless service, potential subscribers must meet certain eligibility requirements associated with the Federal Communications Commission’s (FCC’s) Lifeline programme, such as receiving governmental assistance or a household income that is 135% below the federal poverty level. The specifics of what determines a potential subscriber’s eligibility vary from state to state.

Elsewhere, Lycamobile Tunisia has announced that it has notched up 80,000 subscribers, five months on from its 1 October 2015 launch. The UK-owned MVNO, which piggybacks on the Tunisie Telecom (TT) network, accounted for 21,266 subscribers at 31 December 2015. Lycamobile says that its SIM cards are available nationwide, via branches of supermarket chains Carrefour and Geant.

Finally, Indonesian-owned MVNO Telin Malaysia has admitted that its subscriber base has dwindled to just 18,000. In an interview with IndoTelko, CEO Oki Wiranto admitted that the September 2015 switch between host networks has proved problematic, but noted ‘this step should be done if you want to be more aggressive in the market’. As previously reported by TeleGeography’s MVNO Monday, the virtual operator, which launched over the Maxis network in August 2013, switched to a wholesale contract with U Mobile. The company claimed 21,000 subscribers at the time of the switch.