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Virtual network business model
There are currently no MVNOs in the UAE. MVNOs are a natural part of mobile market evolution and have already been introduced in Europe, North America, South America, Asia and Australia.
- By Cleofe Maceda, Staff Reporter
- Published: 00:02 May 26, 2008
- Atte Miettinen, Chief Strategy & Business Development Officer, Friendi Mobile.
- Image Credit:
There are currently no MVNOs in the UAE. MVNOs are a natural part of mobile market evolution and have already been introduced in Europe, North America, South America, Asia and Australia.
Gulf News: Mobile virtual network operators (MVNOs) have dramatically changed the telecom landscape in other countries. Are there MVNOs in the UAE already?
Miettinen: There are currently no MVNOs in the UAE. MVNOs are a natural part of mobile market evolution and have already been introduced in Europe, North America, South America, Asia and Australia.
Therefore, it's fair to expect that MVNOs will also arrive in the UAE at some point, but this requires a decision from the Telecommunications Regulatory Authority (TRA).
The MVNO business model has enabled a variety of companies to expand into mobile telecommunications, with the type of companies varying significantly both based on market size as well as market maturity.
Will the entry of MVNOs into the UAE eat into the market of etisalat and du?
By their definition, MVNOs are "virtual" operators i.e. they don't own a mobile network, but instead buy capacity from an existing mobile network operator (MNO) on a wholesale basis, then package and sell it under their own brand.
In light of this, MVNOs typically become the largest single customer of their partner MNO already during the first couple of months of operation.
Further, by focusing and specialising on serving a particular segment of the market extremely well, MVNOs are actually important strategic partners for MNOs in a maturing market which requires a multi-segmented market approach, in which different segments are targeted with a customised proposition.
Is the limited number of internet service providers (ISPs) in the UAE posing a barrier to the growth of e-commerce?
Not directly. The limited number of ISPs in the UAE no doubt has an impact on the internet penetration as more competition typically drives affordability as well as ensures that more players are involved in educating the market.
However, the UAE government is becoming more and more advanced in its use of the internet.
In my view, culture is likely to play a much bigger role in the growth of e-commerce. In the Middle East, the human contact and interaction when doing business is more visible and important than in other parts of the world.
Therefore, I believe there's a longer adoption cycle in the Middle East and the UAE specifically for adopting e-commerce than, for example, in Europe.
Having said that, the UAE should benefit from the presence of expats from countries where e-commerce has achieved a significant mass.
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