Ovum has some commentary on French MVNO NRJ Mobile, which is owned by pan-European media group NRJ Group, which does radio broadcasting and music. Its recent results showed that at the end of 2006 it had 312,000 customers (up from 250,000 at the end of December, a 25 percent share of the French MVNO market) and generated 24.3 million euros (US$31.49 million) for 2006, although it posted an operation loss of 15 million euros for the first nine months of 2006.
Ovum appears unimpressed with the operators strategy, saying that the MVNO developed a strategy around mobile entertainment and TV but then obtained customers by offering prepaid cards with an unlimited validity period — resulting in an average revenue per user of 8 euros per month in a country where the market average is 36 euros per month.
I think its using a budget MVNO strategy to attract users but building out a high-value service, and if it can’t convert the budget users to its paid content and services it’s going to lose out.
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