The ‘no-frills’ segment, offering basic services at relatively low prices, was largely responsible for the growth in the Dutch virtual operator market. This includes providers such as hollandsnieuwe, owned by Vodafone and growing strongly. The fixed operators are also expanding in the mobile market, mainly Tele2, which is preparing to launch its own mobile network, and Ziggo, the biggest cable operator in the Netherlands. The no-frills segment remains the largest segment in the Dutch VO market, accounting for about a third of all customers, while the fixed operators take about 11 percent of the total VO market.
According to the researchers, consumers are still focused on price due to the weak economic climate, which is driving the market shift to SIM-only plans and helping the no-frills providers win over customers. The intense competition in the telecom market is also driving fixed operators to focus more on mobile, in order to hold on to customers and boost revenues, according to Telecompaper.
While virtual operators continued to expand their market share, more virtual players exited the market than entered it in the six months since Telecompaper’s last report on Dutch MVNOs. After two new entrants and five exits in the period, the total number of active mobile virtual operators in the Netherlands decreased from 70 in March 2014 to 67 at the end of September.
Dobrytel, which targeted the Polish community, the RTL-Vodafone venture Sizz, PostNL mobile and Rabo Mobiel all ceased operations during the researched period. UPC also ended its mobile broadband only service in favour of a full mobile offering launched after the close of the research, at the end of October 2014. The two new mobile brands launched were Choozze and BelcompanyMix. Choozze is the first player to try the freemium business model in the Netherlands, while BelcompanyMix is the new mobile proposition from telecom retailer Belcompany, belonging to Vodafone.
Since the end of Q3 2014, more companies have left the market, including the youth brands Blyk and MTV Mobile. Meanwhile, the freemium market is expected to get bigger in 2015 with the launch of FreedomPop, a US-based MVNO which recently announced a wholesale agreement with an unnamed Dutch operator. Other new MVNOs planning to launch in the new year include Freetime Telecom and CrowdFone.
In the past year, more VOs have started offering postpaid plans, data services (including 4G at a few MVNOs on KPN’s network) and some even smartphones, in line with the overall trends in the Dutch mobile market. Telecompaper expects that VO players offering 4G access may gain an advantage, attracting increasingly data-hungry consumers. More VOs will need to adopt differentiating services like this if they wish to survive in the market, especially given the continued economic and regulatory pressures. This pressure is only set to intensify in 2015 when Tele2 will switch from MVNO to a full network operator.
