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MVNOs set to make foray into ME market

Jordan is likely to take the initiative of introducing the MVNOs in the region for the first time later this year.

Oman and Bahrain are the other potential markets for the new business concept in telecom industry that has been widely implemented successfully in European markets.

MVNOs are telecom players that use other operators' infrastructure to offer mobile phone services to the end user. This phenomenon has been widely implemented in more mature markets.

"The total value of the MVNOs opportunity in the Middle East region alone could be close to $5 billion — a figure that is attracting a lot of interest amongst small to medium investors and players," according to a white paper — MVNOs in the Middle East: Threat or Opportunity, released by Delta Partners recently.

"The introduction of MVNOs would fundamentally change the industry landscape," commented Rogier van Driessche, Partner with Delta Partners and co-author of the white paper.

The white paper outlines the key questions that stakeholders — regulators, operators and investors — will need to answer and extracts learnings from European case studies.

"We strongly believe that this year the first MVNOs will find a route to market in the Middle East," says van Driessche.

"We predict that Jordan will open to MVNOs first, while other markets with a strong likelihood for the business model's introduction are Oman and Bahrain. This is why analysing the possibilities as well as the pitfalls of this industry with multi-billion dollar potential is now extremely relevant," he added.

As MVNOs will further expand the availability of mobile telephony and make pricing more competitive, it will be the consumer who will reap the benefits.

Launching an MVNO in the Middle East may be a capital-light way to gain access to a market that is growing at 15 per cent per annum — the quickest growing telecom market in the world, the paper said.

MVNOs provide Middle Eastern regulators with the opportunity to introduce levels of competition that would not be economically viable through traditional competition models, the white paper said.