Mobile virtual network operators to gain ground

The market for mobile virtual network operators will generate service revenue of $10.7bn by 2010, the Yankee Group has projected.

Also by 2010, the research company predicted, the field will have a subscriber base of 29 million.

The market will be dominated by large operators, which as a group are likely to have 24 million subscribers in their fold, the Yankee Group said. The rest of the subscriber base will be shared equally by medium-sized and smaller players.

A mobile virtual network operator, or MVNO, offers mobile phone services without actually owning a network. Such companies resell calling minutes bought from major carriers. Virgin Mobile USA, an early player in the market, has a subscriber base of three million.

Large MVNOs will grow and fuel the industry by segmenting the host carriers' target subscriber base and distribution channels, the Yankee Group said.

Marina Amoroso, a wireless analyst with the Yankee Group, said: "The growth of the MVNO market has great potential to influence the long-term viability of the wireless industry. However, even with the current boom, sustainability for medium and smaller MVNOs remains uncertain. Therefore, system integrators and mobile virtual network enablers that provide infrastructure, business support systems and operational support for these MVNOs will experience fewer risks if they anticipate business collapses and plan exit strategies."

Dinesh C Sharma writes for CNET News.com