This week, Amazon officially announced its intentions to launch a prepaid mobile internet services in Japan, signifying that brands are increasingly entering the mobile space as MVNOs. Executives from Redknee, KPN Spain and Informa Telecoms & Media recently sat down to take a closer look at this trend and discussed the key drivers and the likely outcomes.

All of the executives agreed that there was a significant market opportunity for MVNOs. Dario Talmesio, Principal Analyst at Informa said: “There is a lot of interest in the MVNO space globally. In particular, business has been booming in Europe over the past year. Operators outside the European Union are interested in coming into the market and grabbing those customers who have more brand affinity to them than the local operators.”

Talmesio added that MVNOs would need to keep on innovating in order to keep customers loyal. “They need to be able to adapt very quickly and rapidly to the evolving market dynamics. That’s why some of the niche players have an advantage over the larger, more monolithic operators in the market.”

Lucas Skoczkowski, CEO of Redknee, agreed that MVNOs would need to become more nimble and agile. He said: “MVNOs shouldn’t try and become telecom operators – that’s been attempted in the past. They should look to their back office systems to help them become more agile. And they should leverage what they are really good at.”

KPN Spain’s CEO Fernando Reymundo emphasized the importance of listening directly to the customer. As the top executive of an operator that hosts MVNOs, Reymundo has had direct insight into what appeals to customers. He sent out a warning to other carriers in the market: “We’ve seen operators creating very complicated tariffs to divert customers from comparing deals. The customer doesn’t want that. They want simplicity. This situation first happened in the fixed market ten years ago and has now become an issue in the mobile market. It’s something that needs to be addressed.”

The speakers all felt that MVNOs should take more responsibility for their operations. To date, MVNOs have been heavily reliant on their parent operators. “The systems that incumbents are providing are not meeting MVNO requirements for agility, adaptability, and speed,” said Skoczkowski. “We want to provide different avenues for MVNOs to manage their operations through cloud-based technology. Our solutions are high on configuration and low on customization and can be used by MVNOs as they grow. These cloud-based services can also be used to develop new daily deals, promotions and bundles with only a low technology requirement.”

That there is more scope for further innovation in the market is beyond question. According to Talmesio, there were 85 million MVNO customers globally at the end of 2011. Informa is predicting that the market will consist of 186 million customers by the end of 2016. All of the speakers agreed that the era of the MVNO has arrived.

To hear more about where the market is heading watch the full interview here.

Video: Brands Challenging in the Mobile Space

Executives from Redknee, KPN Spain and Informa take a close look at brands entering the mobile space as MVNOs, the drivers and the likely outcomes.