Beyond Consumers: The Future of the Wholesale Market

As we are all gearing up for the next session of #itw2023 and after a very promising start of the year, it is quite evident that the wholesale business for Mobile Network Operators (MNOs) is undergoing significant changes.

The traditional business model, where MNOs sell their services to individual consumers, is no longer sufficient in a market that is becoming increasingly saturated. As a result, MNOs are turning to the wholesale market as a means of generating additional revenue streams. The global wholesale telecoms market is expected to grow from USD 178.2 billion in 2020 to USD 240.2 billion by 2025, at a CAGR of 6.1% during the forecast period. (source: MarketsandMarkets)

The wholesale business for MNOs involves selling access to their network infrastructure to other businesses. This can include other mobile operators, virtual network operators (MVNOs), and even companies outside the telecommunications industry, such as utilities and transportation.

1. One of the key drivers of growth in the wholesale business is the rise of MVNOs. The global #mvno market size is expected to reach USD 113.9 billion by 2027, growing at a CAGR of 7.6% from 2020 to 2027. (source: Grand View Research). This model is becoming increasingly popular as it allows companies to enter the mobile market without having to invest in expensive network infrastructure and offering customers more flexibility and competitive pricing, which can help to drive customer acquisition.
2. Another key driver of growth in the wholesale business is the rise of the Internet of Things (#iotconnectivity ). The IoT refers to the growing network of connected devices, such as smart home appliances, wearable technology, and industrial machinery. The global IoT market size is expected to grow from USD 250.7 billion in 2020 to USD 1,463.2 billion by 2027, at a CAGR of 25.2% during the forecast period. (source: MarketsandMarkets). These devices require connectivity in order to function, and MNOs are well positioned to provide this connectivity, increasingly partnering with companies that provide IoT solutions

The growth of the wholesale business presents both opportunities and challenges for MNOs. On the one hand, it allows MNOs to generate additional revenue streams and reach new customer segments. On the other hand, it also presents challenges in terms of network capacity and quality of service.

In order to capitalize on the opportunities presented by the wholesale business, MNOs will need to invest in two strategic areas to support this increasing demand:

1. Network infrastructure: This will require significant capital expenditure, as well as ongoing maintenance and upgrade costs. In addition, MNOs will need to ensure that their networks are able to handle the increased demand that comes with serving multiple customers with different consumption profiles (from human beings to machines) through different access technologies, from Standard Wireless Access (WiFi, 2G, 3G, LTE and 5G) to Private Long Range (LoRA based platform, Zigbee, and SigFox) and Mobile IoT Technologies (LTE-M, NB-IoT, and EC-GSM-IoT). In order to manage capacity effectively, MNOs will need to invest in advanced network management tools and technologies, such as network slicing and dynamic spectrum sharing.
2. MNOs will also need to invest in their customer service capabilities in order to successfully manage relationships with their wholesale customers. This will require specialized skills and resources, as well as a customer-centric approach to service delivery. Wholesale customers are often looking for high-quality, reliable service at a competitive price. MNOs will need to ensure that they are able to deliver on these expectations, while also managing the costs associated with providing these services.

In conclusion, the future of the wholesale business for MNOs is bright, with significant growth opportunities in the MVNO and IoT markets. However, in order to capitalize on these opportunities, MNOs will need to invest in their network infrastructure and customer service capabilities, while also effectively managing network capacity and customer expectations. By doing so, MNOs can successfully navigate the challenges presented by the wholesale business and position themselves for long-term success in an increasingly competitive market.