MVNO Trends in Latin America: Navigating Growth, Competition and Innovation in 2025
Published by TeleSemana - Spanish version
By Abel Herrera, VP of LATAM, Optiva
Latin America (LATAM) is becoming a full-fledged digital economy, with digital infrastructure innovators and telecom operators best positioned to lead the charge. According to the GSMA’s Mobile Digital Economy 2024 report, the region’s total mobile subscriber penetration reached 72% at the end of 2023, and it's expected to reach 78% by the end of the decade. Specific countries like Argentina, Brazil, Chile and Colombia have already reached more than 100% mobile subscriber penetration.
This rapid growth is partially due to the proliferation of mobile virtual network operators (MVNOs), typically smaller and more agile than their traditional mobile network operator (MNO) counterparts. While legacy systems and the need to maintain physical and digital infrastructure to support millions of subscribers weigh down MNOs, MVNOs are usually small, digital-native companies. They have greater flexibility to adopt new systems and technologies to deliver carefully targeted and personalized mobile services.
The upward trajectory of MVNOs has been, at least in part, fuelled by regulatory reforms that have opened the door for new market entrants. The shift has lowered barriers to entry, allowing MVNOs to thrive in markets where traditional telecom operators once held a stronghold. Mexico is leading the charge, with MVNOs accounting for roughly 8% of all mobile access in the country. Further, several analysts expect this figure to increase to 20% in the next five years.
Players like Bait (Walmart's mobile arm), Oui and FreedomPop have taken advantage of the more flexible regulatory framework to target underserved segments, including low-income consumers and niche markets. Retailers such as Walmart and Elektra are also capitalizing on their supply chains. Cable TV companies are adding mobile services through their own MVNOs or partnering with others to offer multiplay services. Additionally, some MVNOs simply target specific segments and niches. This ability to adapt quickly and offer tailored, cost-effective service strategically targeting segmented markets is helping MVNOs carve out a significant presence.
Other countries, like Brazil and Colombia, are also seeing a rise in MVNO activity. Although some residual regulatory challenges and operational costs have slowed the pace somewhat. In Brazil, where large operators like Vivo and Claro dominate, smaller MVNOs have faced tougher competition and higher entry costs. Despite these hurdles, the overall MVNO trend still points to growth as market conditions evolve. As MVNOs partner with retail giants and focus on digital-first services, they’re finding new ways to attract consumers by offering more customized and affordable plans, further expanding their regional footprint.
Digital Transformation and the 5G Frontier
The rollout of 5G in Latin America is progressing, although it lags behind regions like the United States and Europe. According to the GSMA, 5G accounted for only 5% of the region’s coverage, with 4G still dominating at 66%. Compare this to North America, where 5G accounts for 53%, or Europe, where 5G accounts for 20%.
However, the future is bright. The same research by the GSMA anticipates that 5G penetration will hit 55% across LATAM by 2030, with smartphone adoption among the population increasing to an impressive 92%.
While the potential of 5G is recognized, especially in areas like IoT and AI-driven applications, LATAM is still in the early stages of fully leveraging the technology. Countries like Brazil and Mexico are beginning to explore how 5G can enhance mobile broadband speeds and support new services. However, complex use cases — such as autonomous vehicles or advanced industrial automation — remain far off. Instead, the focus is on more straightforward applications like machine-to-machine communications, which can benefit industries such as logistics and agriculture.
What does this mean for MVNOs? 5G represents a significant opportunity for these nimble operators to offer enhanced digital services beyond traditional voice and data plans. It’s the key to unlocking their potential, allowing them to play to their strengths and differentiate themselves from the “big” MNOs. With 5G in play, they can offer more robust IoT services, AI-driven customer support, and video streaming, which is in high demand across the region.
However, these advancements also come with challenges. MVNOs must navigate technological hurdles and the costs associated with upgrading their digital infrastructures to support these next-gen services. They have a head start on their MNO counterparts in this regard, owing to their digital-first approach to operations. In fact, many MVNOs regard themselves as digital innovators first and mobile operators second, making them well-poised to strike as the 5G rollout continues.
Regulatory and Competitive Dynamics
We have touched on the regulatory environment a couple of times, but what does it look like, and how is it impacting — or enabling — MVNOs? From a regulatory standpoint, Mexico stands out as one of the more favorable markets. Its policies actively encourage MVNO expansion by reducing barriers and promoting competition. This has allowed companies like Bait and FreedomPop to gain a foothold and thrive.
One key factor has been the decision by the Mexican government to acquire the Altan Redes network and leverage it as part of its “Internet for All” initiative. It has turned Altan Redes into a wholesale network that allows MVNOs to provide affordable and flexible services without building their own infrastructure. Around 61% of MVNOs rely on Altan's network in Mexico.
Colombia and Peru are also following similar paths, gradually adopting more supportive regulations that make it easier for MVNOs to operate. Colombia announced a 5G multiband spectrum auction in December 2023, allowing both small and large operators to access 3.5 GHz and 26 GHz bands and creating new opportunities for MVNOs. The country is also refining mobile number portability regulations to ensure easier switching between operators.
Meanwhile, Peru has proposed regulating radio access network (RAN) sharing, which could significantly reduce infrastructure costs for MVNOs and facilitate their market entry. By contrast, Brazil presents more of a challenge, with high operational costs and complex regulatory requirements making it harder for smaller players to compete against established giants like Vivo, TIM and Claro that control more than 90% of the market.
A Note on the Economy
Economic conditions across LATAM pose a mixed set of challenges for MVNOs. High inflation and instability are reducing consumer spending. This is making it harder for operators to maintain profitability while targeting price-sensitive markets. However, there are opportunities for growth in traditionally underserved regions. For example, governments are pushing for increased digital inclusion, as observed in Mexico's “Internet for All” initiative.
These projects open the door for MVNOs to offer flexible and affordable services to rural populations, who often lack access to reliable mobile connectivity. Rather than holding back MVNOs and the telco market in general, telecommunications and digital connectivity are key economic drivers. Therefore, we will likely see growth continue rather than stall due to challenging economic conditions.
What’s Next?
Looking ahead to 2025, the ability to rapidly launch new services while keeping costs low will be critical for MVNOs in LATAM. Speed to market is increasingly important in a highly competitive environment, and those operators that can streamline operations and quickly introduce new creative commercial offers will have a pronounced advantage.
This is especially true for MVNOs focusing on digital-first customer experiences, where automation and self-service tools are becoming the norm. These features help MVNOs cut operational costs and enhance the customer experience, creating a scalable model for future growth that encourages loyalty and competition equally. Parallel to this, expanding 5G networks will open up new possibilities for MVNOs to offer advanced services, such as IoT solutions and AI-driven customer support.
However, operators must carefully manage the costs associated with upgrading infrastructure to handle these next-generation services. MVNOs that can leverage strategic partnerships and focus on cost-efficient models will be well-positioned to take advantage of the growing demand for faster and more reliable connectivity — not least because of their digital agility and their ability to seize new technologies and opportunities.
Published by TeleSemana - Spanish version