IoT MVNO Market Update: Planning for Expansion

Market Overview

• Today, the Internet of Things (IoT) Mobile Virtual Network Operators (MVNO) market is clearly changing, as enterprises expect more from the operator. 
• Swedish-based Telenor Connexion remains the IoT MVNO market leader in 2022 at 15.6% market share. Second place goes to KORE Wireless with a 12.8% market share and third place is a tie between Wireless Logic and 1nce at 9.2% each.
• Growth in the more established North American and Western European MVNO markets will be slower than in the Asia-Pacific, Latin America, and Eastern European regions.
• Variations in growth rates are the result of growing operations in the developing regions, notably Chinese exporters in manufacturing and transport.
• Utilities, the largest MVNO market segment, account for more than half of the 106.1 million connections today. This is largely due to the fact that MVNOs can compete well on price. In 2026, the utility application segment will account for nearly 117 million of 214.6 global connections—again, more than half.
• The healthcare segment is a lucrative business opportunity for MVNOs because the industry necessitates specialized requirements for IoT devices that competitors, such as carriers, cannot capitalize on. Almost 44 million MVNO connections will be up and running in the healthcare industry by 2026.
• In the fleet management & telematics application segment, 14.8 million MVNO network connections are deployed today. That number will more than double to 29.9 million connections by 2026.
• Revenue share for MVNO connectivity and Connectivity Management Platforms (CMPs) is on track for a decrease from 58% today to 52% by 2026. This is the result of enterprise customers seeking Device Management Platforms (DMPs), network security, and other value-added services.

“Connectivity alone is not enough for customers when they are building an end-to-end Internet of Things (IoT) solution.”  – Abdullah Haider, Analyst at ABI Research

Key Decision Items

Provide eSIM Provisioning If Your Customers Don’t Know Device Location

Companies like Estonia-based 1oT have recognized—and capitalized on—the fact that enterprise customers are seeking Internet of Things (IoT) device flexibility. This means service providers should look at offering Embedded Subscriber Identity Module (eSIM) provisioning, a type of Zero-Touch Onboarding (ZTO) for devices. Remote Over-the-Air (OTA) eSIM provisioning allows customers to freely switch connectivity vendors because, unlike Multiple International Mobile Subscriber Identities (Multi-IMSI) provisioning, eSIM (learn more about the true value of eSIM in this whitepaper) doesn’t include pre-loaded profiles during manufacturing. Instead, users can load multiple profiles later.

Although Multi-IMSI is usually less expensive than eSIM and shines in predictable routes, it’s not useful in scenarios where the location of the device will be unknown. Whereas Multi-IMSI provisioned devices will enter roaming mode once the device enters a location not covered by the network profiles, eSIM devices allow users to switch to a connectivity provider that covers the region once the switch is needed. In other words, eSIM prevents enterprises from feeling like they are locked into a specific partner ecosystem that could cause connectivity troubles down the line.

Bundling Is a Necessity

As the Average Revenue Per User (ARPU) in connectivity has declined over the years and connectivity becomes more commoditized, bundling should be seen as a core requirement to remain competitive. While a number of vendors are combining device management services with added security services, some IoT MVNOs are bundling hardware with services. Besides generating more revenue for the service provider, bundling is valuable for enterprise customers because it simplifies Application Programming Interface (API) integration. For example, accessing a single analytics platform that merges both connectivity management and device management from one vendor is much easier than having to manage two separate platforms.

Diversify Products beyond Connectivity

There is no doubt that the telecoms industry is headed for a more cloud-based, “hands-off” approach on the part of enterprise customers. There is no better evidence of this trend than the dwindling revenue share of services for connectivity and connectivity management.

While one could argue that this shift is just the organic effect of an evolving market, it’s also partly the result of changing customer perception. Now more than ever, enterprise customers see MVNOs as an all-in-one solution provider—from network coverage to value-add services like network security. Indeed, enterprises don’t want to deal with server provisioning or IoT connectivity problems. Rather, they just want to focus on developing their core products and services.

Everything else, in the eyes of the enterprise customer, should be the job of service providers. For example, Wireless Logic notes that its customers see security for private networks (5G) as the most urgent priority, so the company’s Cloud Secure and NetPro offerings keep enterprise customers at ease about their IoT connections.

Realize the Value of Enablers

Strong cooperation with other industry players should be viewed as a must-have ability for MVNOs. First, if an MVNO doesn’t provide managed services, then System Integrators (SIs) and Information Technology (IT) consultants can fill the void.

From there, other aspects of the IoT value chain can then be targeted, such as providing connectivity/device management metrics and ZTO for hardware vendors. Additionally, there are opportunities for Mobile Virtual Network Enablers (MVNEs) and MVNOs to work closely together. In this relationship, the MVNE provides consulting services to the MVNO, helps build ecosystem relationships, negotiates carrier agreements, counsels Radio Access Network (RAN) installments, offers white-labeled CMPs, supports invoicing, and essentially serves as an MVNO itself.

MVNOs Can Remove Geographic Constraints for Domestic Carriers

Through extensive interviews, ABI Research has substantiated the trend that national carriers are teaming up with MVNOs outside their home markets. As large carriers often can’t provide network coverage in key regions, this opens up an opportunity for disruptive MVNOs to leverage their infrastructure to expand a carrier’s range across borders. For example, German startup 1NCE signed an exclusive deal with Japanese carrier SoftBank to sell 1NCE services in the Asia-Pacific region. Alliances like this also enable MVNOs to access a new line of ecosystem partners that the carrier already possesses.

Partnerships Enable More Targeted Services

Besides providing a new revenue stream via cross-border network coverage, partnerships can also allow a traditional MVNO to target vertical markets (e.g., automotive, fleets, aviation) that they otherwise would not be able to cater to. Generally speaking, the longer an MVNO has been in the market, the more likely the company is to have accumulated these types of alliances. Another way MVNOs develop vertical expertise is by working with customers in distinct industries. Over time, in-house capabilities become refined for niche areas.

As evidenced by the confirmation from an MVNO interviewed by ABI Research, there is also an opportunity for MVNOs to partner with platform vendors. In this case, the MVNO’s CMP is being white-labeled by the platform vendor for Low Power Wide Area (LPWA) connectivity. 1oT stands out in this area, as the firm has offered white-labeled versions of its CMP to multiple Scandinavian companies, with micro-mobility being the largest segment.

Key Market Players to Watch

• Wireless Logic
• Telenor Connexion
• KORE Wireless
• 1NCE
• 1oT
• Soracom
• Sierra Wireless
• floLIVE
• Pelion
• Transatel
• Aeris Communications
• Telit
• Tata Communications

Dig Deeper for the Full Picture

Amass a far better perception of the IoT MVNO market, including competitive strategies and historical/future forecasts, by downloading ABI Research’s IoT MVNOs: Supplier Strategies and Offerings in an Evolving Software and Services Landscape research report. 

Not ready for the report yet? Check out our The IoT and Operational Visibility Go Hand-In-Hand in the Solar Energy Market Research Highlight. This content is part of the company’s IoT Networks & Services Research Service.