Study: Virtual mobile carriers on the upswing

Who needs a network? The market for companies that resell carriers' calling minutes will boom by 2010, the Yankee Group says.

The market for mobile virtual network operators will generate service revenue of $10.7 billion by 2010, the Yankee Group projected Monday.

Also by 2010, the research company predicted, the field will have a subscriber base of 29 million.

The market will be dominated by large operators, which as a group are likely to have 24 million subscribers in their fold, the Yankee Group said. The rest of the subscriber base will be shared equally by medium-size and smaller players.

A mobile virtual network operator, or MVNO, offers mobile phone services without actually owning a network. Such companies resell calling minutes bought from major carriers. Virgin Mobile USA, an early player in the market, has a subscriber base of 3 million.

Large MVNOs will grow and fuel the industry by segmenting the host carriers' target subscriber base and distribution channels, the Yankee Group said.

"The growth of the MVNO market has great potential to influence the long-term viability of the wireless industry," Marina Amoroso, a wireless analyst with the Yankee Group, said in a statement. "However, even with the current boom, sustainability for medium and smaller MVNOs remains uncertain. Therefore, system integrators and mobile virtual network enablers that provide infrastructure, business support systems and operational support for these MVNOs will experience fewer risks if they anticipate business collapses and plan exit strategies."