Bullish MVNO Outlook For Latin America
Virgin Mobile Latin America (VMLA) announced the commercial launch of its mobile virtual network operator (MVNO) services in Colombia, following a month-long trial to selected users. This is the second market in VMLA's regional expansion plans, as it looks to create a presence in every Latin American country. The MVNO trend seems to be picking up in the region and BMI believes there is plenty of scope for operators to have success, although we highlight the importance of a focused strategy targeting niche markets.
We have a bullish view on Virgin Mobile in Colombia ( see our online service, December 19 2013 'Virgin Mobile Aims To Replicate Success), based on its focused strategy, the growing proliferation of 3G and regulatory decisions to introduce asymmetric termination rates and mobile number portability, in an effort to encourage competition. VMLA first launched operations in Latin America after it set up in Chile and has experienced significant success since the launch in April 2012, accumulating 100,000 customers in the first six months of operations. In Colombia, a number of companies offer mobile services as MVNOs already, Uff! Móvil, UNE-EPM and ETB. VMLA's strategy, targeting the youth segment of the population, should allow it to focus on a niche market. it has already begun offering calls charged by the second instead of minute, which will result in lower prices for subscribers.
VMLA's next target is Brazil, where it hopes to launch services in 2013 and has already partnered with mobile virtual network aggregator (MVNA) Datora. Telefónica, through its Movistar unit, has acted as the mobile virtual network enabler (MVNE) for VMLA's operations in Chile and Colombia, providing the MVNO with the network infrastructure. A good relationship between the two companies would allow VMLA to expand into almost any market it chooses, as Movistar's Latin American presence is almost ubiquitous.
|Focused Strategy Key To Success|
|Uff! Colombia, VMLA Chile, Telsur Chile Subscribers (Q412)|