The next big opportunity for mobile operators, Strand Consult

Ever since the mobile industry started upgrading from 2G to 3G and beyond, there has been discussion about the new revenue streams that the next G would provide. The numbers show growth in both traffic and the number of customers, while ARPU has decreased significantly since the launch of 3G.

Viewed through the eyes of shareholders, 3G was probably the biggest disappointment, especially after European mobile operators spent around €110 billion on 3G spectrum licenses around the year 2000. The fact is that successive generations of mobile technology have primarily delivered improved network quality and greater capacity. New and exciting services are today developed, marketed, and sold by various OTT players, which primarily use mobile networks, operators’ outdated business models, and customers’ mobile phones to deliver their services.

There has long been skepticism about telecom operators’ ability to invent and implement new revenue streams that create significant shareholder value. Apart from aggressive cost cutting, there are essentially two business models that have helped operators improve their business case.

One is premium SMS, which in the years following 1998 made it possible for customers to buy services through a premium SMS sent to a short code. The market was dominated by ringtones, logos, Java games, and TV polls; today, the model is primarily used for TV voting and polling.

The second is the MVNO market, which many operators used to implement multi-brand strategies, increasing distribution while reducing customer acquisition costs. Operators that adopted the right MVNO strategy created significant value for their shareholders.

Strand Consult has published extensive research on the MVNO market. This research shows that the most successful MVNOs have been those that, with a SIM-only model, have focused on selling low-cost national or international traffic. The key question has always been which types of MVNOs can attract large numbers of customers in the future, or alternatively, customers with an ARPU that is higher than what operators achieve today.

Strand Consult’s latest research concludes that defense and public safety organizations represent the next major business opportunity for mobile operators. These players will most likely operate as MVNOs on top of existing mobile networks, using operators’ RAN infrastructure and spectrum.

Strand Consult’s report “How to ensure NATO’s next generation weapons access to modern communication solutions” describes how and why defense actors will migrate part of their communication to commercial mobile networks.

Public safety and emergency services
Many networks serve public safety and emergency services functions. Some 250 networks use TETRA (Terrestrial Trunked Radio), a low-bandwidth standard which works for voice and SMS, but cannot manage broadband application. TETRA terminals are expensive, and monthly usage costs are high.TETRA runs on dedicated spectrum including. Europe use 380–400 MHz. The first TETRA network was launched at Gardermoen Airport in Norway in 1997.

TETRA networks can be found in 130 countries, including Andorra, Austria, Bahrain, Brazil, Bulgaria, Croatia, Denmark, Egypt, Germany, Greece, Indonesia, Israel, Ireland, Jordan, Luxembourg, Malaysia, Monaco, the Maldives, the Netherlands, Norway, Nigeria, Panama, Portugal, Romania, South Korea, Swaziland, Sweden, Turkmenistan, the UAE, Vietnam, the Vatican, and the United Kingdom, among others.

From a mobile industry perspective, TETRA represents a relatively small and niche user segment. In Germany, there are around 500,000 users compared to 108 million mobile subscribers, while in the UK there are approximately 350,000 users versus 118 million mobile subscriptions. In Denmark, the figure is about 45,000 TETRA users in a market with more than 6 million mobile subscribers. Taken together, these numbers highlight that, despite its critical role for public safety, TETRA serves a comparatively limited user base within the broader mobile ecosystem.

Put simply, TETRA networks are dedicated and highly specialized systems designed to serve a very narrow user group. In many respects, the technology can be compared to 2G, with the key distinction that it includes specific mission-critical functionalities not originally available in 2G, 3G, or 4G networks.

The development, selection, and deployment of TETRA was not a flawed decision; on the contrary, it was the right solution at the time it was introduced. The central question today is whether these legacy networks should continue to be maintained or whether users should be migrated to advanced 5G networks, which already provide broad coverage across large parts of the world.

A successful migration depends on public mobile networks being able to replicate the core functionalities used in TETRA systems, deliver comparable geographic and indoor coverage, and do so at a cost that reduces overall expenditure on first responder communications. There is an increasing view that the conditions for such a transition are now being met, and several countries are already in the process of migrating first responder communications from dedicated TETRA networks to standard mobile networks.

The two business models for public safety and emergency communications
Strand Consults notes the two business models for public safety and emergency communications: the integrated platform and the Mobile Virtual Network Operator (MVNO).

The first model is the integrated “platform” approach used in the United States with FirstNet, where AT&T provides an end-to-end solution operating on top of its nationwide network. FirstNet is supported by 20 MHz of dedicated spectrum and approximately $7 billion in upfront public funding, and it serves around 8 million first responders at an estimated ARPU of roughly $40. Importantly, AT&T does not hold exclusivity in this segment, as Verizon competes through its Frontline offering, and T-Mobile entered the market in 2025 with T-Priority.

The second model is an MVNO-based approach, where first responder services operate on top of one or more commercial mobile operators’ radio access network (RAN) and spectrum. This model is increasingly being adopted in Europe. Norway is planning to migrate 150,000 emergency users from a state-owned TETRA network to commercial 5G by 2031, while Finland, the UK, and Sweden are following similar paths. In France, ACMOSS is in the process of migrating around 400,000 first responders to the “Réseau Radio du Futur” (RRF), which is designed to cover 98% of the country and operates as an MVNO leveraging the four national mobile networks. Reports indicate an initial rollout pace of around 8,000 connections in Q1, with a further 8,000 planned in Q2 2026. In South Korea, a comparable model is also being implemented using the networks of SK Telecom, KT, and LG Uplus.

Across these markets, the underlying direction is increasingly consistent. Authorities are recognizing that TETRA systems are approaching the end of their lifecycle, particularly as existing investments have been fully amortized, making it natural to reassess the most efficient replacement technology. Historically, TETRA was selected because key mission-critical functionalities—such as group calls and priority communications—could not be reliably delivered over 2G GSM networks. At the time, it represented the most robust solution available for public safety users.

However, the technological landscape has changed significantly. Modern TETRA devices are specialized and produced in relatively small volumes, which contributes to high procurement costs. By contrast, 5G-based solutions leverage standard smartphones, with mission-critical functionality increasingly delivered through applications layered on top of the mobile operating system.

With the capabilities of 5G networks and modern smartphone platforms, a large share of the functionality required by first responders can now be replicated or enhanced. When combined with the potential cost efficiencies of an MVNO-based model on commercial networks, this represents not only a technological evolution but also a structural economic shift in how first responder communications can be delivered.

Defense: A 3-step solution
Strand Consult has studied this topic extensively and believes that, in the future, the military—particularly in the NATO context—will adopt a similar model, gradually migrating parts of their communication solutions onto the RAN and spectrum of commercial mobile operators. This perspective is outlined in the report “How to ensure NATO´s next generation weapons access to modern communication solutions.” Defense communications development are likely to follow a three-step process. Step 1 is connectivity, Step 2 is more networks, more security and more services, and Step 3 is the integration of people, platforms, sensors, and weapons into a common digital ecosystem.

Step 1: Connectivity, connectivity and connectivity
Today’s armed forces communication landscape is often characterized by a fragmented mix of legacy systems—what is frequently described as a “spaghetti architecture.” In many cases, a significant share of the equipment base is outdated, with devices that are heavy, inefficient, and constrained by battery performance that no longer meets operational requirements.

When integrating new capabilities into these legacy environments, they often fall short of the functionality available in modern 5G (SA/NSA) networks. Going forward, military operations will increasingly require access to infrastructure that can be dynamically upgraded through applications supporting C2 (command and control), ISR (intelligence, surveillance and reconnaissance), UAV operations, AR/VR, smart logistics, and IoT-enabled systems. The Norwegian military has tested ordinary mobile phones during the Cold Response 26 exercise, illustrating early-stage adoption of commercial-grade communication tools in military contexts.

In an initial phase, deployment is expected to resemble the model emerging in the first responder sector. Armed forces would operate as MVNOs on top of mobile operators’ RAN and spectrum, complemented by their own subscriber management platform (HLR/HSS/UDM) and eSIM-based identity and authentication systems. Such an architecture can be scaled across a single country, a defined region, or multiple regions and allied territories.

This approach enables a flexible communications layer capable of supporting both human-to-human communication and machine-to-machine connectivity. In practice, it would provide a foundational communications infrastructure for everything from routine coordination between personnel to data-intensive applications involving advanced weapons systems, military platforms, and autonomous or semi-autonomous machines.

This solution will be able to deliver a basic communication solution with data functionality that can service both people and machines. We are talking about a solution that can be used for communication between people and that can provide data solutions for everything from advanced weapons, military equipment and machines.

Step 2: More networks, more security and more services
In the second phase, both the complexity and the opportunities increase significantly. The platform will evolve in three key areas:

Access to multiple types of networks
LEO, MEO, and GEO satellite connectivity are expected to become integrated parts of the solution. LEO satellite systems will increasingly support data and Direct-to-Device (D2D) communications. The objective is to build a hybrid terrestrial and non-terrestrial network capable of seamless handovers and path optimization across satellite and terrestrial networks, while also supporting multi-orbit constellation management and the simultaneous or sequential use of multiple satellite providers. In addition, the platform will be integrated with the private 5G networks that armed forces are already deploying at military facilities around the world.

Using a Hybrid NTN Bridge, standard terrestrial 5G infrastructure and space-based networks can be interconnected. By translating non-3GPP satellite access into 5G Core-compatible interfaces, operators can enable service continuity and roaming across terrestrial and satellite domains, extending coverage across land, sea, and air.

Enhanced network security
The security requirements for military communications platforms are significantly higher than those found in the civilian sector. These requirements will become even more demanding as 5G networks are integrated with satellite and other communication systems.

The objective is to create a platform that supports self-sovereign identity, zero-trust architecture principles, public key infrastructure (PKI), credential management, and identity federation for coalition partners. The platform will also support certificate lifecycle management, hardware security module (HSM) integration, and post-quantum cryptography migration roadmaps designed to mitigate future quantum-computing threats.

A zero-trust architecture assumes that no user, device, or connection is trusted by default—even when operating inside the network perimeter. Access is granted only after continuous verification of identity, device health, and authorization, while strict controls limit what each user, device, or system can access.

Adding more services
Once the platform is operational, it becomes possible to add new services either as network-based capabilities running across the MVNO platform and the underlying networks it connects, or as applications running on the devices attached to the network.

Historically, mobile operators have struggled to commercialize dedicated network services through APIs and similar offerings. In the defense sector, however, many of these capabilities have clear operational value, creating significant business opportunities for both operators and technology providers.

The opportunities at the application layer are equally extensive. Modern smartphones already demonstrate the power of software-based functionality, and a similar development is expected in defense. As advanced weapons systems, autonomous platforms, and military equipment become increasingly connected, demand for sophisticated communications-enabled applications is likely to grow substantially.

One example is ISAC (Integrated Sensing and Communication), a 5G- and 6G-era technology that allows mobile networks to function as sensing platforms by using radio signal reflections to detect, track, and localize drones and other moving objects. While ISAC cannot match the resolution of dedicated military radar systems, it can provide a level of geographic coverage that traditional radar often cannot.

Given the prominent role drones have assumed in the war in Ukraine, there is little doubt that demand for these types of capabilities will increase. There is also little doubt that such solutions will be built on trusted infrastructure rather than equipment supplied by Huawei or ZTE.

Step 3: Bringing it all together – From communications platform to digital defense infrastructure
The final step is to transform the communications platform into a comprehensive digital defense infrastructure capable of supporting people, machines, sensors, and weapons systems across multiple domains.

Strand Consult believes that defense organizations will benefit from a phased approach. The first step is to establish a secure communications platform based on commercial mobile infrastructure. The second step is to integrate additional networks, security capabilities, and mission-critical services. The third and final step is to connect these capabilities to military platforms, autonomous systems, sensors, and weapons systems.

By leveraging infrastructure that mobile operators have already deployed, defense organizations can significantly reduce both costs and deployment times. Rather than building entirely new communications networks from scratch, they can build on proven and continuously evolving commercial technologies.

Based on Strand Consult’s experience from the MVNO sector, the initial platform could be implemented in less than a year. The integration of additional networks and services should also be relatively straightforward. Several mobile operators have already integrated Direct-to-Device satellite connectivity into their networks, and many more are expected to follow in the coming years.

At this stage, the communications platform becomes the foundation for a broad range of military applications, including command and control, intelligence and surveillance, autonomous systems, smart logistics, battlefield awareness, and weapons integration. The objective is to create a common digital infrastructure capable of supporting communications between people, machine-to-machine interactions, and data exchange with advanced military systems.

One network or many?
One of the questions frequently raised is whether an organization such as NATO will build a single platform covering all 32 member countries, or whether multiple national and regional platforms will emerge and later be interconnected.

Strand Consult believes the latter scenario is more likely. Multiple platforms will emerge, but they will be built according to similar architectural principles and use common methods for integrating networks, services, and security capabilities.

The advantage of this approach is speed. Designing a single solution for all NATO members would inevitably become a complex process influenced by bureaucracy, procurement requirements, and national interests. Regional deployments can move much faster while still maintaining interoperability.

A Nordic-Baltic platform covering Denmark, Sweden, Norway, Finland, Estonia, Latvia, and Lithuania could be one example. The United States may choose to develop its own model and potentially extend it to regions where it has significant strategic interests, including parts of Asia, the Middle East, and Latin America.

The strength of this model lies in its use of standard technologies and interfaces. New networks, new services, and new capabilities can be added as they become available, creating a flexible and scalable platform that evolves alongside technological developments and military requirements.

Ultimately, the end state is not simply a better communications network. It is a shared digital defense infrastructure capable of supporting the next generation of military operations, platforms, and weapons systems.

The security divide in Europe’s mobile networks
Strand Consult has previously outlined how military requirements will place specific and elevated demands on the networks included in future communication solutions. Its research note “Eight risks for the 5G supply chain from suppliers under the influence of adversarial countries like China” highlights the challenges associated with reliance on infrastructure supplied by high-risk vendors. The European Commission has also proposed measures to secure telecom and 17 other critical industries from high-risk suppliers.

Today, out of approximately 100 mobile networks in the EU, around 60 are already classified as “clean networks.” Of the remaining networks, roughly 10 have relatively low exposure to high-risk suppliers (between 10–30%), and most are located in countries where the EU 5G Toolbox is being implemented, meaning they are unlikely to be significantly affected by forthcoming security requirements. This leaves around 30 operators with between 35–100% of their radio access network (RAN) supplied by high-risk vendors, primarily operating in countries where the EU 5G Toolbox has not been fully implemented.

In practical terms, this means that at the beginning of 2026, approximately 30% of installed mobile network equipment across the EU27, as well as Iceland, Liechtenstein, Norway, and Switzerland, originates from high-risk suppliers. While this may appear significant at first glance, it is important to examine where this equipment is deployed and how it is distributed.

A substantial share of the equipment scheduled for replacement over the next five years is concentrated in Germany (Vodafone, O2, and Deutsche Telekom), Italy (Vodafone and Wind Tre), and Spain (MasOrange and Vodafone). Based on Strand Consult’s analysis, combined with figures from the EU’s Regulatory Impact Assessment as well as the underlying figures, these three countries make up over 55% of equipment that must be replaced over the next five years.

Vodafone and Deutsche Telekom (DT) are particularly significant in this context. DT operates across multiple countries with varying levels of exposure to high-risk vendors, including Germany (58%), Greece (100%), Austria (100%), the Czech Republic (100%), Croatia (50%), and Poland (70%). In addition, its subsidiary T-Systems resells cloud solutions built and operated on Huawei infrastructure. Vodafone is also heavily exposed in several European markets, including 100% reliance on Huawei in the Czech Republic, Greece, Hungary, and Romania, as well as 67% in Spain and 53% in Germany.

In simple terms, NATO and European policymakers are already aware of which countries and operators face structural challenges in providing Armed Forces with access to networks built exclusively on trusted vendors. At present, approximately 60 operators across Europe are positioned to deliver the level of trusted infrastructure that future defense and security requirements will demand—these are de facto trusted operators.

Conclusion
Many countries are already in the process of migrating first responder communications from legacy TETRA networks to MVNO-based solutions operating on top of commercial mobile networks. Strand Consult believes that this model will gradually spread to the more than 130 countries that currently rely on TETRA for public safety communications.

When it comes to defense, Strand Consult expects a similar development. Military organizations in Sweden, Norway, and Finland have already conducted many tests involving commercial mobile networks and devices during NATO exercises. These trials provide valuable insight into how future military communications can leverage commercial infrastructure and technologies.

The question is no longer whether this transition will take place, but rather who will be first to deploy a scalable solution—and how quickly additional networks, enhanced security capabilities, and new services can be layered on top of the platform.

One thing is certain: most mobile operators already have MVNO interfaces and operational processes in place. These capabilities provide a natural foundation for building the communications platforms that will support future defense and security requirements. Strand Consult