Only 11 percent of mobile phone users in the U.K. says they would prefer to use an MVNO over traditional networks, according to a new research report. Despite high levels of awareness of MVNOs—9 in 10 mobile phone users say they are aware of at least one MVNO brand—the study found that U.K. consumers remain reluctant to switch. Thirty-five percent of them say they would never consider using any provider but one of the major mobile networks.
The survey also shows prevalent confusion about what MVNOs are and how they are different from the major mobile networks. One is the biggest misconceptions about MVNOs is that they have weaker network signals, with 38 percent of respondents believing they would get a better signal from a major network than an MVNO. On the other hand, 28 percent of respondents believe that MVNOs offer contract flexibility, and 19 percent expect MVNOs to offer more “perks.”
If the U.K. is in any way indicative of what consumers in other advanced markets believe, MVNOs have a long way to go in terms of convincing consumers that their product is worthwhile. As a first step, they need to explain what exactly their product is.
The fact that this ignorance remains, in spite of the fact that MVNOs have been in the marketplace for a long time now, and in spite of their advertising and marketing campaigns, is remarkable. While it is possible that the finding is an anomaly pertaining only to the U.K., we feel it is likely that it points to a larger problem in which many MVNOs leverage existing customer bases to get business and focus their marketing on fairly narrow specifics, without advocating for the MVNO concept in a broader way. The result is that potential customers may not really understand how an MVNO works, why signal strength should be a non-issue, and what advantages MVNOs may have over the major providers for certain kinds of customers.
On the other hand, in many markets there are simply too many MVNOs, some of them based on gimmicky concepts, and public lack of understanding of their raison d’être could indeed correspond closely to reality. The main point is, that if an MVNO is established in response to a genuine market need, it has the potential to do well, but it must not assume that customers know what an MVNO is and that they have confidence that it is fully functional.