MVNOs will turn to content - and turn mobile upside down

Cheap-as-chips promises no longer enough...

Cheap-as-chips promises no longer enough...

The mobile market is set to get even more competitive, according to analysts, as MVNOs (mobile virtual network operators) ratchet up the pressure on old-school providers.

MVNOs, which have previously staked out their territory as low-cost providers, will start to turn their attention to selling themselves by offering particular types of content, a new report from Frost & Sullivan predicts.

The analyst believes that regulators' determination to open up markets and the appearance of smarter handsets will trigger the emergence of content-based 3G MVNOs, focusing on distinct cultural or lifestyle groups.

According to the report, the new competition provided by MVNOs will prompt a raft of acquisitions, mergers and withdrawals over the next 18 months.

Among those likely to chance their arm in the MVNO world are the fixed line operators looking to get into the converged fixed-and-mobile market. NTL has already made the first steps in this direction with its ongoing attempt to buy MVNO Virgin Mobile.

Figures out yesterday from Ofcom revealed MVNOs now account for 5.5 million mobile phone contracts, out of a total 62.5 million in the UK.