MVNOs in Southeast Asia are still seen as a way to further penetrate the market segments which established mobile operators are not able to capture, as the demographic and economic diversity of the markets in the region still present substantial opportunities despite mobile saturation and decreasing subscriber growth. Among several factors, we believe that the availability of a critical mass is the most important consideration, as it establishes whether there is a demand from a sizeable demographic segment. This factor has been critical in Malaysia and Thailand for instance, compared to other countries in the region, thanks to the presence of a large number of foreign visitors and as well as migrant workers, both segment addressed with specific MVNOs’ offers.
Regarding business model differentiation, across the region, the trend will continue for non-telco companies to use an MVNO service as a tool to up sell their other existing products. This is evident with multinational companies such as 7-Eleven and Tune Talk wherein they expand beyond their home markets to offer services that complement their existing products and services. 7-Eleven's MVNO SpeakOut Wireless has established presence in Singapore (2008) and Malaysia (2011) where it is banking on its fast food chain stores to market mobile services to the youth, travellers and blacklisted subscribers of other mobile operators. Tune Talk is also expanding to other countries such as Indonesia and the Philippines, following its Malaysian launch in 2009 and Thailand in 2013. Apart from mobile services, Tune Group is mainly engaged in hotels, insurance and airlines business, and its MVNO unit is expected to increase the market visibility of the company's other services through its Tune Talk unit. In fact, some of its mobile offers are already closely linked to the company's other services such as free flights (care of its Air Asia unit) and life insurance in Malaysia (care of its Oriental Capital Insurance subsidiary).
As market saturation and high competition are leading to intense price pressure, ARPU levels have been declining in most markets. One approach that MVNOs adopt, to mitigate the impact of deteriorating ARPU, is exploring services other than traditional voice and SMS, especially data offers. Several European MVNOs have already adopted a data-only MVNO strategy, and the same business approach can also be replicated in Southeast Asian markets to sustain growth.