Neobanks test MVNO model, but few will succeed as mobile value chains shift, says GlobalData

Tangible evidence of large-scale mobile customer migration to neobank MVNOs is yet to be clearly demonstrated

A compelling neobank MVNO play requires a broad, mobile-first financial platform that tightly integrates app-centric account control with adjacent digital services image credit: bangoland/shutterstock

A small but growing group of branchless digital banks (neobanks) are moving into the mobile virtual network operator (MVNO) space as operators and fintechs realign mobile value chains. Although advancements such as eSIM adoption and turnkey MVNE/MVNO platforms have reduced entry barriers, achieving commercial viability and operational efficiency in this space remains highly demanding, says GlobalData, publishers of Retail Banker International.
Natasha Rybak, Principal Analyst, Global Telecom Consumer Services at GlobalData, said: “Banks and large retailers have long used basic prepaid mobile offers to extend customer relationships and monetise existing distribution. For neobanks, though, the calculus differs. Beyond straightforward mobile payments capability, a compelling neobank MVNO play requires a broad, mobile-first financial platform that tightly integrates app-centric account control with adjacent digital services—travel, loyalty, and payments—so that mobile connectivity becomes another cross-leveraged product in a unified customer proposition.

Potential benefits for banks/MVNOs

“When those elements align, cumulative benefits emerge: an embedded customer base, integrated app management of multiple services, data-driven loyalty mechanics, and payment-linked perks. This daisy-chain approach can accelerate customer acquisition and deepen retention, potentially posing a more direct competitive threat to telco mobile revenues than legacy retailer MVNOs that rely primarily on physical distribution and basic prepaid offerings.”
Traditional operators need not see the trend as purely disruptive. Major carriers have already adapted to evolving dynamics, leveraging eSIM normalisation to launch international roaming and travel-focused digital brands such as Orange Travel, eSimFLAG and Vodafone Travel eSIM that demonstrate new routes to revenue beyond core connectivity. For incumbent telcos, partnership, wholesale MVNE models and targeted digital spin-offs offer pragmatic responses to emerging neobank competition.
Rybak concluded: “Tangible evidence of large-scale mobile customer migration to neobank MVNOs is yet to be clearly demonstrated. Several constraints limit the cohort of successful entrants: the need for significant existing digital reach, monetisable customer engagement, and operational expertise in mobile service provisioning and regulatory compliance. In short, technical feasibility has outpaced robust commercial validation. Still, select, well-capitalised neobanks with strong user bases and mature product ecosystems will pilot and scale MVNO offerings, but widespread disruption of carrier revenues is unlikely without clearer proof points of sustained mobile customer migration and monetisation from these new breed neobanks.”