“When the telecommunications market is fully saturated, investments have already been made and competition is no longer growing, regulators must make the acceptance of MVNOs mandatory,” principal analyst and competition expert at Cullen International, Veronica Bocarova, told the forum of Georgian Network Operators Group (GeoNOG 2020).

The Cullen International expert does not believe that MVNOs can present any form of threat in Georgia. According to her, international practices clearly show that MVNOs create new opportunities in many areas.

“Switching to a mobile virtual network operator does not require a change of network. Customers remain on the old network, existing MNOs retain wholesale revenues, while the new players can use the resources of existing operators, but cannot offer better terms of service.”

According to Ms Bocarova, a good example of a successful MVNO is Virgin Mobile, who first appeared on the British market in 1999 and became one of the leading brands in terms of customer satisfaction in the space of a few years. The competition expert notes that Georgia has underdeveloped markets and segments that can be developed by virtual operators.

“Based on the information that I have obtained about the Georgian market, I can confidently say that there are niche markets that can be better served by new players, as they must better understand the specific needs of various customer groups. The national regulator must therefore be open, create the right conditions for market development, and allow the market to make the most effective choice by itself,” the Cullen International expert stated.

The GeoNOG 2020 forum was attended by the Head of Telecommunications Market Regulatory Department at the Communications Commission, Ekaterine Imedadze, who spoke about the necessity and importance of allowing virtual operators from 2021. According to her, international practice shows that MVNOs are an effective means to improve the competitive environment on the market. Virtual operators boast the best performance figures in all areas of customer satisfaction. The companies can easily adapt to the constantly changing needs of the customer, as they can offer favourable terms which traditional operators do not tend to focus on.

“There are more than 1300 virtual operators in around 80 countries across the world, including the United States, Germany, Japan, United Kingdom, Australia, Spain and France. Their advantages in the field of technological innovation are evident. The number of MVNOs grew by 61% between 2010 and 2018. According to the latest figures, the number of MVNO subscribers exceeds 220 million, which is 2.46% of the total global subscriber base. The US has the highest amount of virtual operators (139), while Denmark accounts for the largest market share held by MVNOs. The number of virtual operators is set to increase by a further 18% and reach a figure of 260 million subscribers by 2022, while the value of the MVNO market will increase by more than 40% by 2024,” Ms Imedadze stated.

Mobile virtual network operators represent a tried and tested practice in western countries. MVNOs do not have their own infrastructure. They instead use the infrastructure of other operators to supply services. This allows them to diversify the market and increase competition at minimal costs.