What lies ahead for Mexican MVNOs after their booming growth?

After flourishing in recent years on the back of Mexico's 2013 telecoms reform, creation of the PPP Red Compartida and regulatory measures easing access to network and spectrum, MVNOs now face the challenge of personalizing services and offering content to users.

This is the view of Rocío Villanueva, president of Mexican MVNO association Amomvac, who spoke on the topic during a panel at the Futurecom conference in São Paulo, Brazil. 

“When Altán [Red Compartida’s concessionaire] was created, a door was opened, the costs for operators went down and that made MVNOs grow rapidly. After six years of Altán's operation we have more than 130 MVNOs in Mexico,” Villanueva said at the event.

“We believe without a doubt that the key factor to be able to gain market share is segmentation. MVNOs in Mexico are segmenting and creating quite niched products,” added the executive.

Among these products are customized mobile services aimed at women, students, the LGBTQIA+ community, as well as the health and financial services areas, among others, mostly beyond the urban zones where market leader América Móvil concentrates its operations. 

Mexico’s mobile market has over 147mn users. Of the total, 17mn are in the hands of MVNOs, according to Villanueva, or 11.5% of the market.

The executive said that growth “in the last few years” for MVNOs was more than 40%.

During 2023, these mobile players reported an average of 1.5mn new users per quarter, said Villanueva, well above the average of the incumbent mobile players.

The MVNO market in Mexico is well developed compared with economies of a similar size, such as Brazil, and in line with the standards of developed markets in Europe.

MVNOs' share of the total mobile base in Brazil, for example, is less than 2%. The most developed MVNO markets in Europe boast rates of 20-40%.

Unlike Mexico, a major focus for MVNOs in Brazil has been the IoT segment, through offering SIM cards for car tracking, machine connectivity and related applications.

André Martins, CEO of Brazilian MVNO aggregator NLT, said that of approximately 45mn IoT accesses in place in Brazil, around 10% belong to MVNOs.

“The Brazilian market is far below the global average for IoT devices” despite the figures, Martins said at Futurecom.

The executive said NLT is interested in expanding in Latin America and that the company already has contracts and accesses in place in both Mexico and Chile.

COLLABORATION 

As previously reported, Mexican regulator IFT inked a collaboration agreement with Amomvac in September to further develop the segment and spur stronger competition in the mobile market.

Among the activities planned by IFT and Amomvac are the sharing of statistics and market data, human resources training and joint telecoms studies.

“Joint actions will be taken to develop this market segment in favor of competition in mobile services, and thus for the benefit of users,” IFT said at the time.

Villanueva is optimistic about the prospects for the segment.

“At the association we believe that MVNOs will be the vehicle for connectivity. But we don’t want to stop there. We want to add services and value. If we generate value, we can have a much more competitive market, with benefits for the end user,” she said at Futurecom.