Mobile Virtual Network Operators (MVNOs) rely on a partner's mobile network infrastructure and wireless spectrum to offer services to consumers. For the first time, Opensignal has quantified how the mobile network experience of leading German MVNOs compares with the experience of using the big three mobile operators. Examples of leading German MVNOs include 1&1, Aldi Talk and Mobilcom-Debitel. These MVNOs tend to offer mobile services at a cheaper price than the major brands.
In Germany, there are three networks which own their own spectrum and infrastructure and act as host partners: Telekom, Vodafone, and O2 — usually called Mobile Network Operators (MNOs) — all other operators are MVNOs which use the network infrastructure of an MNO, or are separate brands part-owned by one of the big three.
In our May report on Mobile Network Experience in Germany, we looked at how the user experience differed between the three major German Mobile Network Operators (MNOs), with Telekom winning all of our awards except Latency Experience, which was secured by Vodafone.
By analyzing our users’ 4G speed experience, we observed differences in both download and upload speeds experienced by our users on MNOs and MVNOs. Taking the customer experience of each respective host network as the baseline, we compiled the difference in download and upload speeds for our users on our selection of Germany’s largest MVNOs.
We found our users connecting across all MVNOs on average experienced 4G download speeds 23% slower than our users connecting on the host networks which the MVNOs were leveraging. Similarly, we found upload speeds experienced were 20% slower on average than users on the host network. For O2-hosted MVNOs, the download speed difference was -18%, while the upload speed difference was -11%.
What makes O2 stand out from its peers is that the operator hosts many more MVNOs than Vodafone or Telekom. In 2014, regulators mandated that 30% of O2’s network capabilities should be available for use by MVNOs as a condition for O2’s merger with E-Plus. This move triggered a period of initial rapid growth to the MVNO sector, followed by consolidation into a 48-million-subscriber, $11-billion-per-year market in 2018.
The MVNO market in Germany is highly saturated (see this 2019 MVNO market report). While MNOs share their network with multiple virtual carriers, the predominant MVNOs tend to be part of larger telecom or retail groups such as 1&1 Drillisch, Aldi, LIDL or Tchibo, or in some cases they are subsidiaries of their host operator. Mobilcom-Debitel stands out as it is the only MVNO offering 4G services across all three host networks, which makes it possible to directly compare the MVNO experience measured on each host network.
When we looked at the distribution of 4G Download Speed measurements for our Mobilcom-Debitel users across its three host networks, we saw a fairly consistent pattern: a large proportion of our Mobilcom-Debitel users that connect using Telekom’s network can reach higher speeds than Mobilcom-Debitel users that connect with either O2 or Vodafone. Our users connecting across O2 mostly experienced 4G Download Speeds concentrated below 20 Mbps, with 13% of the O2 users experiencing less than 4 Mbps.
At the upper end of the speed range, for Vodafone and O2-hosted Mobilcom-Debitel we saw 2% and 1% of users reach speeds between 60-70 Mbps. Meanwhile, 11% of our users on Mobilcom-Debitel hosted via Telekom reached speeds above 70 Mbps.
While the example of Mobilcom-Debitel is useful for understanding what experience MVNO users receive on different host networks, looking at some of the other MVNO brands shows that the host network experience is not the only factor affecting the speeds experienced by our users on MVNOs. The difference in average 4G Download Speed that our MVNO users experienced varied from just 4% slower to 36% slower than what our MNO users experienced on the respective host network. Our users on 1&1 Drillisch saw the smallest difference, while our Ortel users experienced the largest gap.
In Germany, MVNOs usually state which host mobile operator they are using, which enables the MVNO to builds on the brand of their host network in their marketing. However, Opensignal’s data clearly shows that MVNO users on the same host network have a different experience. While the difference between host networks’ speeds is large, it is no guarantee that users on MVNOs of faster hosts necessarily experience faster speeds.
For the most part, our MVNO users experience significantly slower speeds than customers of the host network brands — O2, Telekom and Vodafone — although there are a few notable exceptions such as 1&1 Drillisch and Mobilcom-Debitel where the difference in experience is smaller.
As the European mobile market has matured, there has been consolidation resulting in fewer operators, which presents a risk of reduced competition among the network operators, potentially leading to higher tariffs and less choice for users. One way to mitigate this risk is to expand the MVNO sector. In an attempt to boost competitiveness, some regulators imposed measures which benefited smaller players. Nowhere is this more evident than in Germany, where MVNOs enjoyed a subscriber count equal to 58% of its population, or 48-million, as of 2018.
MVNOs play an important role in increasing consumer choice. Understanding the real-world mobile experience that users have on both host and MVNO networks helps show consumers the difference between smaller players such as MVNOs, compared to the national mobile network operators that own infrastructure and wireless spectrum. In order to ensure consumers have a clear view of the different choices in the mobile market, both MVNOs and MNOs need to be honest and transparent about their users’ mobile network experience.