China’s MVNO market, which was opened up just a year ago, is already showing signs of consolidation.
“Miao more” has closed its flagship FunTalk store in Beijing and LianLian Tech reportedly will shut down all of its provincial branch operations, a signal it will likely pull out of the MNVO space, C114.net reported.
LianLian Tech VP Zhang Rui, however, denied it was closing down but acknowledged that the company was “adjusting in related business”, the portal said.
The top four players accounted for 80 per cent of the 2.1 million subscribers the 41 MVNOs had at the end of 2014, which is far short of the government’s 10 million target.
The move to give private firms a licence to resell mobile services a year ago is a two-year pilot project — the government reportedly will review the status of the MVNOs at the end of this year and revoke the licence of firms with a poor performance.
The country’s new breed of MVNOs is in the trial-and-error stage. Although they understand they need to differentiate their services and not merely offer what the big three operators do, they are finding it difficult to actually find viable market segments to address.
Analysts say that in the rush to bring in new players into the newly opened market, the government approved licences for virtual operators that hadn’t made the necessary preparations, C114.net said.
Another major obstacle has been fierce competition in the 3G market, with the wholesale prices offered by the big three similar to the retail prices, or even higher, which has made it difficult for the MVNOs to create attractive offerings.