Expatriate communities offer the best target for MVNOs in the Middle East, according to Informa Telecoms and Media

Both Friendi and Renna operate through agreements with fixed and mobile incumbent operator Omantel, which has suffered a significant loss in mobile-market share as a result of the rise of No. 2 operator Nawras.

Informa Telecoms & Media believes that best prospects for the first MVNOs in the Middle East, particularly in the GCC1, is to focus on the large expatriate communities.

There were 12.8 million non-nationals in the GCC states in 2005, accounting for 36% of the total 36 million inhabitants of the GCC, according to the United Nations.

South Asian countries account for the largest numbers of expatriates in the GCC. India is the single largest contributor of expatriates in the GCC, and there are also sizeable expatriate communities from Bangladesh, Pakistan, the Philippines and Sri Lanka.

"There is a clear opportunity for MVNOs in the Middle East to offer the sizeable expatriate communities here customised services with features such as call-centres that are available in their own language, and value-added services including content offerings that cater for their interests and backgrounds,"

said Matthew Reed, Senior Analyst Middle East and Africa, at Informa Telecoms & Media.

"Significant numbers of people within these groups are also likely to find the offer of discounted calls - both local calls and international calls - attractive so that is another area that MVNOs should look at."

The progress of MVNOs in Oman will be closely watched across the region, by operators, regulators and potential MVNOs. Jordan also has advanced legislation for allowing MVNOs, although none of Jordan's three GSM operators have so far been unwilling to host MVNOs. Bahrain and Turkey are also discussing legislation to allow MVNOs to enter their markets.

Nevertheless, the MVNO market in the Middle East and Africa region is likely to remain modest in size for some time. According to research by Informa Telecoms & Media, there will be 2.65 million MVNO and reseller2 subscriptions in the Middle East and Africa at end-2009, rising to 3.77 million at end-2013, with South Africa likely to remain the largest single MVNO and reseller market in the region.

The main service approaches taken by MVNOs worldwide fall into the following categories, according to research by Informa Telecoms & Media:
- Discount
- Community/segment-targeted
- Full service, emulating a mobile network operator (MNO) or host network
- Premium service provider (of data and/or entertainment services)
- Converged bundled services or fixed-mobile convergence
- Location-based services
- Enterprise/business-focused
- Advertising
Often the community-targeted services focus on ethnic or national groups, such as expatriates or nationals with a particular immigrant background, for example those of a Turkish background in Germany, or North African in France and Belgium.
Community-focused services are the second-largest category of MVNOs worldwide, accounting for 20.2% of MVNOs globally in 2007, according to Informa Telecoms & Media.

MVNOs also offer an opportunity for companies from other sectors - such as retail - to move into the telecoms services market. In the Middle East, mobile handset and devices are usually sold by independent retailers rather than by the operators. By becoming MVNOs these handset retailers could dramatically extend the range of their offerings to include telecoms services, taking advantage of their existing relationship with consumers.

Other retailers, such as supermarkets, have been among the most successful MVNO operators in Europe and that experience could be transferred to the Middle East. The Carrefour and Ikea chains, which both have a presence in the GCC, operate MVNOs in Europe.