Global Insight Perspective | |
Significance | Retail chain Carrefour has extended its European MVNO operations to Poland, targeting the lower-end market. |
Implications | The operator has set a goal of 100,000 subscribers within 12 months. This moderate target is realistic, given the existing level of competition, and triple-digit penetration. |
Outlook | The Polish regulator sees MVNOs achieving a market share of up to 15% by the end of 2010, a rather strong projection given that the current market share is closer to 1%. |
French supermarket chain Carrefour today (9 April) launches its mobile virtual network operator (MVNO) service in Poland, under the brand name "Carrefour Mova". The company will piggyback on the network of mobile operator Polkomtel, which offers its own services under the "Plus" brand. Mobile virtual network enabler (MVNE) Effortel Polska is co-operating with Carrefour in the facilitation of the mobile virtual network.
There are currently around 200 companies registered in Poland as MVNOs, although until Carrefour's market entrance only four actually offered commercial services. These are cosmetics retailer Avon, portal Wirtualna Polska and MNI, each of which use PTK Centertel's Orange network; and Mobilking, which in February 2008 launched services using PTC's network. Earlier this month the Polish regulator, the UKE, reported that mobile penetration in the country was 108.9% at the end of 2007. However, it pointed out that this figure was distorted by around 10-15% by a large proportion of inactive pre-paid SIM cards.
Outlook and Implications
Carrefour's Moderate Subscriber Goal is Realistic: Carrefour Mova is offering calls to all operators at 0.49 zloty (US$0.22) per minute, and chairman Gilles Roudy is widely quoted as stating that the company is targeting 100,000 subscribers within 12 months. This low tariff indicates that Carrefour will use competitive pricing in order to achieve its subscriber goal, in a country in which the proportion of lower-end pre-paid subscribers stands at around 60%. Customers may also be tempted by the prospect of gaining free minutes when they shop at Carrefour supermarkets and hypermarkets. However, entrance into a market with triple-digit population, and in which four GSM operators and four MVNOs already exist, is risky. Within this climate, Carrefour will offer product differentiation, but may struggle to make significant subscriber gains. In a country with a population of around 38 million, Global Insight considers operator's 12-month target of 100,000 subscribers to be realistic. In its favour, Carrefour already has experience as an MVNO in Europe, with operations in France, Italy, Spain and Belgium. The phenomenon of a retail chain capitalising in a mobile market as an MVNO is not unique to Carrefour. Tesco Mobile offers such services in the United Kingdom, where it has utilised its recognised retail and brand name presence to establish itself with around 1.5 million subscribers, and last year it expanded its MVNO footprint to Ireland.
Regulator's Projection For MVNO Market Share Would Require A Surge: Earlier this month, as part of its telecoms strategy for 2008–10, the UKE suggested that it expected MVNOs to account for around 10-15% of total market subscribers by the end of 2010 (see Poland: 7 April 2008: Raft of New Regulatory Measures Outlined in Poland). This would translate to around 4 million subscribers. By the end of 2008, MNI and Mobilking aim to achieve 200,000 subscribers each, while Avon targets 50,000, with Carrefour targeting up to 100,000. For these numbers cumulatively to reach 4 million just two years later would require something of a surge in uptake. By comparison, in France, a market in which Carrefour also operates, and one with lower penetration than Poland, MVNOs accounted for 4.8% of subscribers at the end of 2007. Given current subscriber levels in Poland, Global Insight sees the UKE's 2010 MVNO market share prediction as slightly strong, even allowing for the arrival of further new players. Much will depend upon the strategies adopted and niches targeted by the MVNOs, both established and new. On the positive side, the triple-digit penetration level should not be considered too restrictive to uptake, as countries around Europe are witnessing penetration surges towards 150% and beyond, driven by multiple-SIM ownership. Nevertheless, it would be unusual for MVNOs to constitute up to 15% of a market, particularly from a starting point of around 1% just three years earlier.