Assessing the economic costs and benefits of MVNOs
Project experience | Consulting
Analysys Mason was commissioned by the regulator of a major South-East Asian country to conduct a study on the costs and benefits of developing a larger mobile virtual network operator (MVNO) sector, as a basis for enhanced service-based competition in the mobile market.
Analysys Mason set out to:
- firstly develop a quantified understanding of the costs and benefits of fostering a larger MVNO market with a view on how various MVNO models and segment focus affect these costs and benefits
- and subsequently provide the regulator with a view on the level of government intervention that may be justified in enabling and supporting such an outcome.
We prepared case studies of several MVNOs across the globe and created a shortlist of relevant MVNO models for the regulator. These case studies formed the base for modelling both the MVNO business cases and the subsequent net economic benefits from changes in consumer and producer surpluses caused by entry of the MVNOs.
The business cases provided insight into the possible financial bottlenecks, whereas the view on the benefits generated by MVNOs provided a general envelope of investment that the government may consider in order to remove the barriers to entry that may prevent the benefits from being realised.
Based on the results of the model, we identified possible types of intervention and assessed their costs and effectiveness.
The regulator prepared a public consultation on MVNOs using the insights from the modelling of net benefits and possible types of interventions.