CTExcelbiz was launched through the operator’s subsidiary China Telecom Europe, and its MVNA partner, Transatel.

China Telecom has introduced anMVNO into the UK market, becoming the first Chinese operator to launch a service outside of China. CTExcelbiz is running on Everything Everywhere’s network and offer a customised service to the UK’s Chinese population.

CTExcelbiz was launched through the operator’s subsidiary China Telecom Europe, and its MVNA partner, Transatel.

The service is a tailored Pay-As-You-Go service that will offer Chinese language voicemail services, bi-lingual Chinese-English customer service hotline and website, unlimited free calls among  CTExcelbiz users and low-cost bundles, available in-stores and online.

“With increasing numbers of Chinese visitors to the UK, we will be rolling out innovative and targeted mobile services to our customers,” said Yan Ou, Managing Director of China Telecom (Europe). “These will include the provision of a local Chinese number for friends and family to call; a chat application for customers to share content with each other; and an information service hotline in Chinese targeted at travellers to the UK, to name just a few.”

Francesco Radicati, research analyst at Informa Telecoms and Media, explained that there has been a rise of ethnic MVNOs that target specific communities in the UK market.

“Traditionally, the UK operators weren’t able to get into these communities, so MVNOs such as Lebara and Lyca Mobile sprung up in response to that. Those were never really primary SIMs, most people generally used a UK operator SIM, such as Vodafone, for example, and then for calling home they’d use a Lebara or Lyca SIM,” he said.

“That’s changing now though. O2 for example has launched its international calling rates and there is Skype and other OTT options.”

“For China Telecom it’s a way to reconnect with customers who have moved to the UK, and to hold on to existing users while they’re visiting, whether as students, businesspeople or tourists. It’s also a way for companies such as Everything Everywhere to get access to this market.”

The launch is also important in that it reflects two trends that we see currently playing out in the UK market. The first is the rise of ethnic MVNOs that target a specific community; this is in contrast to the more generalist players that have traditionally dominated the ethnic segment, Lebara Mobile and LycaMobile. Although Lyca and Lebara have been able to use their multi-country, multi-operator strategies to keep prices low, players like CTExcelbiz are able to offer services specific to their target markets, such as customer service in the user’s native language.

This is particularly important in a country like the UK, which has a large and diverse population, with a great many separate ethnic groups that may need different services from their mobile provider. In the case of CTExcelbiz, Chinese-language voicemail and customer service are essential for tourists who may not know English or know which SIM to buy to call home.

The other trend the launch of CTExcelbiz reflects is that of foreign operators setting up MVNOs in the UK to target their fellow citizens living abroad. This gives foreign telcos a way to reconnect with expatriates and give them a cheaper way of staying in contact with relatives back home. A notable example is in Germany, where Turk Telecom and Turkcell have both set up MVNOs catering to Germany’s large Turkish community, while Vodafone offers discounted rates on prepaid calls to its Turkish network (this is not limited to mobile operators, of course, as German-based fans of Turkish football club Fenerbahce can make calls on the Fenercell network). In the UK Vizz Mobile has signed agreements with Sri Lankan operator Dialog and Afghan operator Roshan to target those communities.

We expect this trend to continue, as immigration, tourism and student or business travel increase. It gives travellers the chance to pick up a local SIM that they can use for the duration of their stay, and lets the existing UK MNOs get traffic from customers they would normally not have access to. Call it part of the move toward globalization: a patchwork of MVNOs reflecting the UK’s cultural mix.

To reduce the risk of this happening mobile operators in Europe are keeping the cost of wholesale mobile data high enough to deter any MVNOs from offering a service that is attractive to heavy data users. Wholesale prices tend not to be regulated so it is pretty easy for operators to set a pricing structure that would prevent, for example, an MVNO from setting a high retail price for SMS and voice services and a competitive price for data.

But what if regulators did start setting price caps for data wholesale tariffs? Might this be enough to encourage the likes of Apple and Google to enter the MVNO business?

This is precisely what the European Union is in the process of doing for roaming services. And if new players such as Google or Apple enter the roaming data business, as Informa Telecoms & Media believes they will, might this not give them the appetite – and a backdoor into – the national mobile data market?

New EU roaming proposals

In late March the European Parliament, Council and Commission agreed to new wholesale and retail price caps for roaming services for the period July 2012 to June 2017. The glide path for data roaming will see the maximum price of wholesale data fall to €0.05 per megabyte by July 2014 compared with a retail price cap of €0.20 per megabyte. These prices are interesting on two levels. First, the difference between the wholesale and retail price caps means that there is a significant opportunity for new players to compete in the data roaming market so long as they can build enough volumes to justify the investment in setting up a roaming MVNO. Secondly, the price of €0.05 per roaming megabyte is, according to research by Informa Telecoms & Media, about the same price that many mobile operators are offering MVNOs for national data services.

The new EU roaming regulations – which will be ratified within the next few weeks – is designed to help both existing “national” MVNOs and future “roaming-only” MVNOs – to compete with operators in providing roaming services to end users. In the same way that national MVNOs buy national voice and SMS services at a discount of around 50% on retail prices, they will now be allowed to buy roaming services at a discount of 50-70% on the retail price cap.

“Roaming-only” MVNOs will be able to enter the market from July 2014 by offering (voice, SMS and data) roaming services to people who want to stay with their existing operator for their national services. The Commission wants the industry to develop a technology which puts a second identity (dual-IMSI) on mobile users’ SIM cards which allows them to have separate providers of national and European roaming services while retaining the same number for both. There is a variation on this approach which relates only to data roaming. The concept is called “local break-out” with the idea being that when someone crosses an EU –border they can then subscribe, on the spot, to a mobile data service provided by one of the networks in that country. The visited network operator would set the price for the service but it would appear on the bill provided by the user’s home network operator.

European regulators are still trying to figure out the best technical approach for allowing these dedicated “roaming” MVNOs to enter the market. There is some concern that the cost of implementing the dual-IMSI approach will outweigh the benefits in terms of lower costs to mobile users.

Data offers the best opportunity for new players

But the local-breakout option is relatively straightforward and easy to implement from a technical perspective. The real question here is who will have the brand, the marketing reach and the distribution channels to pitch their roaming-only services to end users. We are doubtful that many existing MVNOs can compete in this space because they do not have good enough access to those mobile users who might be interested in buying a mobile-only data service. Another possibility is travel companies, insurance firms or airlines who could offer roaming packs on intra-European flights. But we believe that the most likely players to enter this space are either the operators themselves or smartphone OEMs via their application stores.

Most smartphone users today turn off data roaming when they arrive (or before they arrive) in a foreign country. With an activated data connection many data applications run in the background without the mobile user even benefitting from using service. So, it is possible to run up a high mobile roaming bill even without using the service because most roaming data price plans are charged on a per-megabyte basis.

This is frustrating for smartphone vendors because it means that their customers cannot use their devices when, arguably, a data connection could be most useful to them. There is massive pent-up demand for data roaming services because when people are away from home they could use the Internet for a whole range of communications, information and entertainment services that they may be able to access at home using other media. In the case of Google, no data connection means no advertising revenues.

Data roaming could also be a lucrative opportunity for players such as Apple or Google. By the end of this year there will be close to 100 million Android and 50 million iPhone users in Western Europe. The profile of iPhone and Android users correlates closely with mobile roamers because they are mostly high-end consumers and business users. Furthermore, both Google and Apple would be able to market roaming services via their applications stores, Google Play (formerly Android Marketplace) and Apple’s Applications Store.

Neither Google nor Apple has commented on this potential new opportunity but we think it inevitable that they will assess its potential. The easiest way for them to enter the market would be either to set up an MVNO business themselves and go around negotiating deals with operators in each country or, what  is more likely,  to work with an operator or MVNO (or MVNE) who already has these agreements in place.

If Apple or Google do enter the market, and their customers like the idea of buying a service from them rather than the operators, it would only be logical for them to look to start providing services in national markets. As we pointed out earlier, operators can use wholesale pricing approaches to prevent an MVNO from being competitive in the retail market. But such is the level of competition between operators in many European markets that it is quite feasible that one operator would take the view that it has more to gain than to lose by acting opportunistically and becoming the preferred wholesale partner of a smartphone OEM. Once this happens then Apple or Google will have the chance to become fully-fledged providers of mobile services.

The move is a first for a Chinese operator

China Telecom’s European arm is to launch consumer facing services for the first time outside of China after striking an MVNO deal with UK carrier Everything Everywhere.

The deal was secured through Everything Everywhere’s mobile virtual network aggregator (MVNA), Transatel, and takes the company’s portfolio of MVNO partnerships to 24 in the UK.

The MVNO will launch in the first quarter of this year and will specifically target Chinese residents and businesses in the UK, as well as Chinese students and tourists.

Yan Ou, managing director of China Telecom Europe, said: “Entering the UK mobile market is a strategic move for China Telecom. We are keen to launch the service in the UK as soon as possible as there is a real gap in the market for the  provision of tailored mobile services and competitive tariffs aimed at the growing Chinese population in the UK.”

South Africa's MTN has now begun its LTE pilot program

A new MVNO has launched in the UK, targeted exclusively at the African migrant community, claiming to be the first player to launch prepaid mobile credit transfer over SMS between the UK and Africa. The service effectively allows African callers to reverse charge calls to the UK.

Vizz Africa will provide a dedicated mobile SIM card to allow the African community living, working and travelling to the UK, to communicate with their friends and relatives in Africa at discounted rates.

The company claims to have agreements with all of the African operators, and the service allows users to transfer pre-paid mobile credits to loved ones back in Africa safely.

“We wanted to launch MVNOs targeted towards specific communities,” Pat Nabhan, CEO of parent company QiComm, told Telecoms.com. “The first one was with Dialog Vizz for the Sri Lankan community. We wanted to see how successful that could be and we’re now at 10,000 activations per month,” he added.

He added that the firm has plans to launch international mobile money transfer services in addition to airtime credit transfer, but that a number of banking regulatory hurdles remain to be negotiated.

“There are plans, but we’re taking things one step at a time,” he said.

Ou Yan, managing director, China Telecom Europe

The European arm of Chinese carrier China Telecom will name the host of its forthcoming UK MVNO play before September, managing director Ou Yan told Telecoms.com. China Telecom Europe, which focuses predominantly on international backbone and enterprise and carrier services, will be launching a UK MVNO before the end of Q112, targeting the half a million Chinese living in Britain with a SIM-only, Chinese content offering, Ou said.

The firm has received bids from host networks in the UK, Ou said, and will be making its selection in less than a fortnight. Key criteria include coverage, 3G network performance and price, Ou said.

“We are the world’s largest Chinese content provider and we know how to deliver this kind of content,” he said. “I have been living in the UK for six years now, and it’s not very easy for the Chinese community here to get Chinese language content, so this could be our entry into the consumer market.”

If successful, Ou plans to replicate the MVNO in other European markets, including France, Germany and Italy, where there are substantial Chinese communities. France has the largest Chinese population in the region, Ou said, with more than 600,000 resident Chinese. The firm also plans to target Chinese tourists visiting the region. But China Telecom Europe is not looking for a single host operator across Europe, Ou said, arguing that this might limit the firm’s expansion.

The Dutch MVNO market remains dynamic

Almost one third of mobile subscribers in the Netherlands are customers of virtual operators, according to a report published this week by Dutch analyst house Telecom Paper. The total number of MVNO subs in the market has now hit 6.6 million, or 32.8 per cent of the total subscriber base, the analyst said.

More than half of the virtual brand customers—56.4 per cent—are on MVNOs owned by the market’s mobile operators, which are gaining share. Telecom Paper said that 13.7 per cent of the total Dutch mobile market are customers of independent MVNOs, down 1.3 per cent on Q3 2010.

At the end of the first quarter of 2011 there were 56 MVNOs operating in the Netherlands, although 11 of these control the majority of the market. This number has remained the same since Q3 last year, although there remains movement in the market, with several players exiting and others taking their place since that point.

“Hi and Telfort are the leaders of the operator-owned brands and Lebara and Lycamobile of the independent MVNO brands,” the analyst firm said in a statement. “In terms of network operator usage, KPN continues to lead, although it has lost some share. Both Vodafone and T-Mobile increased market share, with T-Mobile growing the most due to its acquisition of Simpel and growth at Ben.”

Telecom Paper said that new entrants will need to innovate on service proposition and by finding niche markets, such as immigrant populations. “New players will have to differentiate themselves by offering real value-added services, and not just plain voice and SMS services, in order to survive,’’ said Alejandra van de Roer, senior analyst at Telecompaper and co-author of the report.

Everything Everywhere now has 21 MVNOs under its belt

UK network venture Everything Everywhere, a collaboration between T-Mobile and Orange, said Thursday it has won three new mobile virtual network operators (MVNOs) – Priyo, The Phone Co-op and RMmobile.

The deals were secured by MVNA Transatel, taking Everything Everywhere’s total of MVNO customers to 21.

All three new MVNOs will launch within the next month, with Priyomobile targeting Bangladeshis living in the UK; The Phone Co-Op offering mobile, line rental, calls, and broadband integrated into a single bill; and RMmobile targeting business customers.

Everything Everywhere’s existing MVNO partners include Virgin, H3G, Telecom Plus, GET, Ikea, Vectone, Nowtel, Matrix, Econet, Lyca, Ethnic Challenge, Cable and Wireless, i-Pass, Opal, Intercity, C Mobile, Axis Telecom, and Unicom.

Turkcell has announced its launch in the German market

Europe’s third-largest operator in subscriber terms, Turkcell, has announced its intention to expand into the European market, starting with Germany in April this year.  As part of the newly formed subsidiary Turkcell Europe, the German MVNO will involve the launch of 1200 retail locations and will initially target Turkish citizens living and travelling in Germany with pre-and-postpaid offerings.

With over 33 million subscribers, Turkcell has a 54 per cent market share in Turkey; it also operates in Azerbaijan, Kazakhstan, Georgia, Moldova, Cyprus, Ukraine and Belarus. CEO Sureyva Ciliv said that the initial target market will be Turkish citizens living in Germany who wish to keep in touch with relatives and are “keen on receiving Turkish content and information.” According to Turkcell, further expansion into the European market will be based on the Turkish ex-pat population of any given country. In an effort to attract users, the operator has abolished roaming rates for ex-pats living in Germany and is hoping to gain a four per cent share in the market there.

Turkcell, which is 37 per cent controlled by Sweden’s TeliaSonera, had originally planned to launch in Germany at the beginning of this year, following an announcement of a five-year 3G network-sharing deal with Deutsche Telekom in October 2010. Last week, TeliaSonera said that it was preparing to take legal action against Turkcell board of directors chairman Colin Williams over claims that the company was blocking the increase in number of independent board members. TeliaSonera claimed that it had been denied the right to raise the issue at the company’s AGM.

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