CDG Press Releases
CDMA2000 OPERATORS ENABLE WIRELESS’ NEXT BIG OPPORTUNITY
Mobile Virtual Network Operators Turn to CDMA2000 for Bandwidth, Reliability and Device Selection
Costa Mesa , Calif. — March 23, 2006 — The CDMA Development Group (CDG) (www.cdg.org) announced today that the CDMA2000® industry in the U.S. is playing a key role in wireless’ next big opportunity: the $10 billion mobile virtual network operator (MVNO) market. This type of service provider targets specific demographics rather than traditional, broader categories such as consumers or business users. For example, Virgin Mobile USA caters to the youth market, while Movida Communications is focused on Hispanics. The common denominator is that the majority of MVNOs rely on CDMA2000 networks.
“By choosing CDMA2000 by a wide margin, MVNOs have sent a clear message about what matters: bandwidth, data, reliability and device selection,” said Perry LaForge, executive director of the CDG. “Regardless of whether an MVNO is targeting the entry-level prepaid or enterprise market, the CDMA2000 industry has a solution to fit every business plan and market.”
The MVNO market in the U.S. drove approximately $2 billion in revenue in 2005 and had 5.5 million customers, according to the analyst firm Ovum. By the end of the decade, the MVNO market could be worth $10 billion annually and have 25 million customers, Ovum estimates. Research firm Yankee Group expects the MVNO market in the U.S. to be worth $10.7 billion by 2010 with 29 million customers. According to a January 2006 survey by In-Stat, roughly 80 percent of existing and prospective cellular users said that they would consider buying service from an MVNO.
That’s a huge opportunity – one that CDMA2000 service providers and handset vendors are ideally positioned to capitalize on. Sprint enabled the first U.S. MVNO, Virgin Mobile USA in 2002, and today CDMA2000 operators have MVNO agreements with Amp’d Mobile, Disney Mobile, ESPN Mobile, HELIO, Movida Communications and Qwest Communications International. CDMA2000 has the spectral efficiency that allows an operator to ensure high quality of service for its customers, but still have enough bandwidth to serve the customers of its MVNO partners. In the case of Virgin Mobile USA, the MVNO added three million customers in its first 30 months – a growth rate that a CDMA2000 network could easily handle.
CDMA2000 is ideal for nearly any MVNO service, such as:
“3G opens exciting possibilities for MNVOs that offer services beyond discount voice and SMS and for mobile operators to move into new markets,” said LaForge. “By being first to market with 3G and broadband, CDMA2000 operators are in a good position to capitalize on this opportunity.”
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