Mobile Virtual Network Operators

As per the Gulf News, Mobile Virtual Network Operators (MVNOs) have dramatically changed the telecom landscape in many countries. The MVNO business model has enabled a variety of companies to expand into mobile telecommunications.

By the definition, MVNOs are "virtual" operators, that is, they don't own a mobile network, but, instead, buy capacity from an existing Mobile Network Operator (MNO) on a wholesale basis, then package and sell it under their own brands. The MVNO, typically, becomes the largest single customer of its partner MNO.

Further, by focusing and specializing on serving a particular segment of the market extremely well, MVNOs are actually important strategic partners of MNOs, especially in a maturing market, which requires a multi-segmented market approach, in which different segments are targeted with a customized proposition.

There are currently no MVNOs in the UAE. MVNOs are a natural part of mobile market evolution, and have already been introduced in Europe, North America, South America, Asia, and Australia.

Therefore, it's fair to expect that MVNOs will also arrive in the UAE at some point, but this requires a decision from the Telecommunications Regulatory Authority (TRA) of the UAE.

The limited number of ISPs in the UAE no doubt has an impact on the internet penetration, as more competition, typically, drives affordability, as well as ensures that more players are involved in educating the market. However, the UAE government is becoming more and more advanced in its use of the internet.

In my view, culture is likely to play a much bigger role in the growth of e-commerce. In the Middle East, the human contact and interaction, while doing business, is more visible and important than is in the other parts of the world.

Therefore, I believe there's a longer adoption cycle in the Middle East, and in the UAE, specifically, for adopting e-commerce than, for example, it is in Europe.

The UAE should benefit from the presence of expats from countries where e-commerce has achieved a significant mass.