Potential for mobile virtual network operators in CEE/A

For mobile virtual network operators (MVNO – providers that don't have their own cellular network), Austria's potential is far from exhausted. Potential market share in the discount segment could be 20 to 25%, yet the four domestic providers together account for just half of that. One reason is the aggressive price war between the "normal" providers, which also makes entering the market for more MVNOs unattractive. Another is the heavy competition among the discount providers. Lastly, subsidiaries of established network operators are at a distinct advantage e.g. when negotiating network use.

Market leader yesss! has an estimated 6% market share, bob roughly 3-4%, Tele2 Champion (previously Tele2mobil) had 1.6% in 2006. Key success factors are having your "own" network (parent company), rapidly establishing a brand and access to a retail structure with good coverage. Providers in Austria are having difficulty meeting these requirements.

The Central and Eastern European countries (CEE) are attractive growth markets, but market penetration must be at least roughly 70% so that enough working used cell phones are in circulation. For example, Hungary has a penetration rate of 98% but as yet there are no providers on the market, letting sales potential of approximately EUR 35 million per operator languish untapped. Less developed are the Southeastern European markets of Romania, Bulgaria or Serbia. In Romania, cellular penetration is just under 70%. The Ukraine has a longer way to go with 37%. Providers from Western Europe must set up contracts with existing network operators, since local regulators have not mandated opening up the network.