Mobile virtual network operators to be introduced in 2021

By Natalia Kochaishvili

Thursday, December 3

An MVNO is a wireless communications services provider that does not own the wireless network infrastructure. MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates and sets retail prices independently.

“When competition in the telecommunications market is not growing, regulatory commissions should make it mandatory to allow virtual mobile operators on existing networks.”

The Communication Commission of Georgia is working to introduce mobile virtual network operators (MVNOs) in the country in 2021.

At the Internet Governance Forum of Georgia held last week, Veronica Bocarova, principal analyst of independent regulatory intelligence provider, Cullen International said that while the telecommunications market is mature, investments have already been made, the market is fully saturated and competition is not growing, regulatory commissions should make it mandatory to allow the introduction of MVNO. She does not agree with the opinion that MVNOs in Georgia may be a threat in any form.

“In case of switching to MVNO operator, there is no need to change the network, users remain on the old network again and MVNO operators still retain wholesale revenue, while new players use the resources of existing operators, but they will be able to offer better service terms to customers,” Bocarova said, thus concluding that the mobile virtual network operators do not threaten the market, on the contrary, according to her the international practice shows that MVNOs bring new opportunities.

According to a competition expert, a good example of MVNO is Virgin Mobile, which first appeared in the UK and a few years later took one of the leading positions in terms of customer satisfaction.

The principal analyst says she studied the Georgian market and can say that "there are niche markets that might better serve new players."

The forum was attended by Ekaterine Imedadze, Head of the Telecommunications Market Regulation Department of the Communications Commission, who spoke about the importance and need for access of a virtual operator by the Communications Commission from 2021.

According to Imedadze, MVNO is an effective way to improve the competitive environment in the market. Virtual operators have the best indicators with all the parameters of the quality of customer satisfaction. Companies easily adapt to the constantly changing requirements of customers, because they have the opportunity to make favorable offers to clients, which traditional operators do not focus on.

Imedadze recalled that in more than 80 countries around the world, including the United States, Germany, Japan, the United Kingdom, and others there are more than 1,300 virtual operators, whose advantages in the field of technological innovation are obvious. From 2010 to 2018, the number of MVNOs increased by 61%. According to the latest data, MVNO subscribers exceed 220 million, which is 2.46% of the total worldwide subscriber base.

According to the existing forecasts, by 2022, the number of MVNOs will increase by 18% and reach 260 million subscribers, and by 2024, the market value of virtual operators will increase by more than 40%.

Giorgi Shamugia, CEO of GNS said that the decision of the Communications Commission to allow MVNOs is one of the most strategic steps for the development of the country and the telecommunications market. According to him, his company as a potential MVNO needs to remove barriers to network access.

Shamugia spoke about the importance and necessity of allowing mobile virtual network operators to enter the telecommunication market, adding that the decision guarantees that new market players will not have problems accessing the network. Interested companies and potential virtual operators will be able to attract and implement investments more effectively to offer customers effective services. Shamugia also stressed that this decision will be an impetus for the telecom sector to reduce prices, increase quality, and increase competition in the market.