Strategies of Mobile Virtual Network Operators in the Southeast Europe Region

Anto Domazet () and Nadzida Saric ()
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Anto Domazet: Faculty of Economics, University of Sarajevo, Bosnia and Herzegovina
Nadzida Saric: Head of Interconnection and Market Regulation Division, Communications Regulatory Agency of BiH, Bosnia and Herzegovina

Interdisciplinary Management Research, 2009, vol. 5, 123-135

Abstract: MVNOs (Mobile Virtual Network Operators) are companies that function as mobile operators but do not have their own frequency spectrum allocation or the necessary network infrastructure. Those companies make business arrangements with one or more licensed Mobile Network Operators (MNOs) by leasing from them the access to mobile network and capacities. Such business concept enables the MVNOs to participate in the mobile communications market, thus extending the value chain and providing innovative mobile communication services specifically adapted to target segments. MVNOs have significant share on the mobile market in Europe and make influence on customers of mobile services in the meaning of change a telecom company and develop the new competitive strategies. The aim of this paper is to evaluate and predict the growth strategies of the MVNOs into the South-eastern Europe markets (SEE). Findings of comparative analysis have based on the research of secondary sources, practice of EU countries with licensed MNOs and MVNOs and on our expert opinion. Findings indicate that MVNOs which are financially strong have used service development strategy on the present market, while companies which operate in mobile telephony as a core business have chosen market development strategy. Strategy of diversification is the most applicable for companies which have a background and its core business within fixed and Internet and have added mobile telephony services to its portfolio. Strategy of expansion on the present market in combined with present services is not frequent on MVNO market. As an alternative growth strategy, MVNOs in SEE countries will apply a diversification strategy that implies parallel development of new services and new markets with the aim of expansion. The major motive for applying the diversification strategy can be a relatively small existing customer base and a new market entry. Appearance of MVNOs on the SEE market will be in form of partnership strategy with existing MNO as a form of international contracting cooperation. Pan-European global MVNO will change the industry of mobile market which will be driven by market forces, technological evolution and it will present an example of creative process destruction.

Keywords: MVNO; growth strategies; entry strategies; foreign market; mobile communications (search for similar items in EconPapers)
JEL-codes: L22 L96 (search for similar items in EconPapers)
Date: 2009
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