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

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30 Sep 2019

Russian bank VTB has become the latest financial institution to enter the domestic MVNO space, following the launch of VTB Mobile on 25 September. The newcomer has launched over the network of Tele2 Russia and joins Sberbank-backed SberMobile and Tinkoff Mobile, a subsidiary of Tinkoff Bank, in the sector. Anatoly Pechatnikov, deputy president and chairman of the management board of VTB, commented: ‘In accordance with our strategy, we are developing a single digital ecosystem of the bank … Our customers will receive a simple, convenient and safe service under a single VTB brand … We launched it in Moscow, but soon SIM cards will be available in St. Petersburg, and next year in other cities of Russia.’ Self-styled ‘MVNO Factory’ Tele2 claimed to serve a total of 2.6 million MVNO customers over its networks as of end-August 2019.

A well-known Russian name that will not be entering the MVNO sector any time soon is ISP ER-Telecom, the country’s second-largest fixed broadband operator by subscribers. According to TeleGeography’s GlobalComms Database, ER-Telecom launched a pilot MVNO service in the city of Kirov in March 2016 over the network of Tele2 Russia, and the following month it launched a similar pilot in the Novosibirsk region hosted by the MegaFon network. ComNews quotes company president Andrei Kuzyaev as saying: ‘In short, we are closing the virtual operator project because we cannot achieve Full MVNO [status]. And, in fact, our and MegaFon’s cross-sales were blocked. As a result, we did not get the result that we expected … Unfortunately, there was no operator who could trust us with a Full MVNO.’

Another would-be MVNO that has experienced a rocky road to launch is Virgin Mobile Ecuador, which has made scant progress since receiving a licence on 9 December 2016, via the holding company Tribemobile Ecuador Tribemosa SA. Speculation regarding an imminent launch emerged last week after Virgin Group boss Richard Branson was photographed meeting with Ecuadorian president Lenin Moreno in New York. However, it has subsequently been clarified that Virgin’s original concession was revoked after the MVNO failed to achieve a commercial launch within one year of receiving the licence. Going forward, it is understood that Virgin Mobile Latin America (VMLA) will now be issued with a new concession, as the Ecuadorian authorities seek to generate fresh competition and lower prices within the mobile sector.

Finally, it appears that YuanTel – one of China’s largest MVNOs – has been sold to an unidentified buyer. When reporting its 2018 financial results last week, California-based IoT firm Borqs Technologies noted: ‘Due to the sale of the MVNO Business Unit in the year 2019, the MVNO activities for 2018 were presented as discontinued operations.’ The sale is expected to conclude before end-2019. Borqs reported that unaudited MVNO revenue for 2018 was USD27.4 million, compared to USD32.1 million in 2017, representing an annual decrease of 14.7%. Borqs previously stated that the MVNO unit ended 2017 with 5.44 million registered subscribers, making it the country’s second-largest virtual operator at that date; no 2018 subscriber figure has been provided.

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