Virtual Mobile Operators (MVNO) are gaining more and more ground within the mobile segment in Mexico. From 2020, the year the pandemic began in the country, to the end of 2021, they have gone from having a market share of 1.9% to 5.1%. Although it is still a moderate percentage, experts consider that this figure could be up to 20% within five years, surpassing companies such as AT&T and Telefónica, which currently hold 15.4% and 18.7%, respectively.
This increase in participation is due to the fact that MVNOs –companies that do not have a frequency spectrum concession, but lease it to operators such as Telcel and AT&T– have managed to position themselves as an alternative for Mexican consumers by offering more affordable connectivity services in an environment in which inflation tightens the pockets of users with greater force.
According to the consulting firm Selectra, MVNO connectivity services are up to 30% cheaper than those offered by traditional operators.
“The pandemic arrived and they (the MVNOs) began to understand very well that they were a solution that was adapted to the needs of the user, and today they are [with a market share] of 5%. We predict that by 2027 they will reach 20% of the total market in mobile lines”, says Rolando Alamilla, market research manager for The Ciu consulting firm.
At the end of the last quarter of last year, these companies such as Izzi Móvil, Walmart’s Bait, EXiS or Telgen, which are housed in the Altán Redes infrastructure, promoted the growth of mobile lines where 4.5 million mobile lines were subscribed for reach a total of 132.4 million, of which 1.7 million correspond to MVNOs.
Jesús Romo, director of the Telconomía consultancy, considers that another factor that has made MVNOs attractive is the added value that they can represent for users. Bait, Walmart’s mobile service, for example, allows users to access a connectivity service for making purchases at its branches and, in turn, allows the company to build consumer loyalty.
In addition, the MVNOs do not oblige the user to maintain a contract for more than one year to acquire a postpaid plan with a telephone equipment, since the economic crisis currently makes users avoid acquiring financial commitments.
Now Izzi, Megacable or Bait can offer users postpaid plans from three months to one year, without the need to have a contract in between, and only pay it in a single installment, which makes it more attractive for users. .
“They are already getting into this (postpaid) segment that was thought to be exclusive to traditional operators. We always say that for there to be competition in the mobile segment, another operator must enter, but here the MVNOs are doing very well,” says Romo.