Mobile virtual network operator

A mobile virtual network operator (MVNO), virtual network operator (VNO), or mobile other licensed operator (MOLO), is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers. An MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently.[1] An MVNO may use its own customer service, billing support systems, marketing, and sales personnel, or it could employ the services of a mobile virtual network enabler (MVNE).[2]

History

MVNO agreements with network operators date back to the 1990s, when the European telecom market saw market liberalization, new regulatory frameworks, better 2G network technology, and a subsequent jump in wireless subscriber numbers.[3][4] Though the new 2G networks more efficiently managed the limited frequency bands allocated to wireless service, new mobile entrants were still limited by their ability to access frequency bands in a restricted spectrum.[5]

With European markets newly open to competition and new technology enabling better service and cheaper handsets, there was a massive surge in demand for cellular phones.[4] In the midst of this swell, Sense Communications fought for access to mobile network operator (MNO) spectrum in Scandinavia in 1997.[6] Sense was able to establish an MVNO agreement with Sonera in Finland, but it failed to persuade MNOs in Sweden, Denmark, and Norway.[7] Sense then appealed to EU regulators, citing provisions that required certain MNOs to allow new entrants interconnection. While Sense's claim was denied, in November 1999, the company signed a service provider agreement with Telia/Telenor Mobile for GSM network capacity access, allowing Sense to offer services to its own customers in Sweden and Norway.[8]

Despite Sense's initial failure, the regulator in Denmark saw the promise in the MVNO model as a cost-effective route for telecom companies to enter the market and in May 2000, legislation passed that required network operators with significant market power to open up access to their infrastructure.[9] By August of that same year, the MNO SONOFON had solidified the first viable MVNO agreement with Tele2. This agreement provided Tele2 with access to SONOFON's network for both mobile and roaming services, the latter of which had been requested by (and denied to) Sense Communications. With the new regulations in place, MVNOs in Scandinavia eventually grew to a market share of above 10%.[10]

By 2008, US wireless subscribers had a choice between around 40 MVNOs. According to the FCC, approximately 7 percent of all U.S. mobile subscribers were served by resellers, including MVNOs, and analysts found that the 15.1 million wireless subscribers served by resellers by the end of 2006 had increased by 1.6 million over the previous year.[11]

Types

MVNOs are distinguished by their commitment to owning and managing the operational components of the MVNO business model,[12] consisting of:

  • Access to basic network infrastructure, like base stations, transceivers, home location registers, and switching centres.
  • Service packaging, pricing, and billing systems, including value-added services like voicemail and missed call notifications.
  • Consumer-facing aspects like sales, marketing, and customer relationship management activities like customer care and dispute resolution.

Because MVNOs are effectively defined by their lack of spectrum licenses, an MVNO necessarily will need to have agreements in place to access the network of at least one MNO. The type of MVNO is determined by how "thick" or "thin" a technological layer an MVNO adds over its access to its host MNO's network.

Branded reseller

Sometimes referred to as a "Skinny MVNO", as the reseller almost totally relies on the MNO's facilities. They do not own any network elements, but may own and operate their own customer care, marketing, and sales operations.

Service Provider

Sometimes referred to as a "Light MVNO". The service provider operates its own customer support, marketing, sales and distribution operations, and has the ability to set its tariffs independently from the retail prices set by the MNO.

Enhanced Service Provider

Sometimes referred to as a "Thick MVNO". The MVNO manages a more complete technical implementations with its own infrastructure which allows the MVNO more control over its offerings. These MVNOs have a heavier focus on branding, customer-ownership, and differentiation through added services like data and SIM applications.

Full MVNO

These MVNOs have a network implementation operating essentially the same technology as a mobile network operator. Full MVNOs only lack their own radio networks.[13]

Around the world

As of June 2014, 943 MVNOs and 255 MNO sub-brands were active worldwide. This represents a total of almost 1,200 mobile service providers worldwide hosted by MNOs, up from 1,036 in 2012,[14]

According to GSMA Intelligence, between June 2010 and June 2015, the number of MVNOs worldwide increased by 70 percent, reaching 1,017 in June 2015. The report further noted that the 10 countries with the largest number of MVNOs in June 2015, was Germany with 129 MVNOs, the U.S. with 108, the UK 76, the Netherlands 56, France 49, Australia 43, Denmark 43, Spain 35, Poland 27, and Belgium with 26.[15] Japan is next with 23 MVNOs.[16]

In addition to traditional cellular voice and messaging services, in 2014, 120 MVNOs also were offering mobile broadband services.[17] In Africa, Uganda has registered three MVNOs so far, some having their own network infrastructure within major cities, but acting as an MVNO out of these cities.[18]

MVNOs target both the consumer and enterprise markets. The majority of MVNOs are consumer-focused and most have a focus on price as their selling point; on average, customers of major carriers spend about 3.4 times as much money on their service as MVNO customers.[19]

Indian Market also opened up for VNOs - As per TRAI Govt regulations, VNO Policy has been rolled out and Multiple Cable Operators/ISP's/New Players have started Applying and 50+ companies received approval for a Virtual Network Operator (VNO) from the DoT, a majority of the VNO licenses were awarded to Tier 1, 2 & 3 cities. Plintron was awarded INDIA National VNO license.

Multiple Countries MVNOs

Some MVNOs have a presence in multiple countries, either as subsidies, joint ventures, or through brand licensing agreements with local partners. i.e. Lycamobile 25 countries, Virgin Mobile 12 countries, Lebara 9 countries, Tesco Mobile 5 countries.

United States

There are about 300 MVNOs operating in the U.S., which are estimated to hold about 1 in 10 wireless subscriptions—36 million customers in all. That number has roughly doubled since 2009, thanks to a trend of the larger providers allowing customers to more easily switch networks, and a significant decrease in the cost of wholesale network capacity rates. MVNOs have tended to receive better customer service marks in the U.S. than the big carriers, with Consumer Cellular, Ting, and Republic Wireless topping the Consumer Reports industry customer service satisfaction rankings.[20]

To better compete with MVNOs, which tend to offer service at lower rates[21] than the major US wireless networks directly, some large American carriers also market wireless service using their own captive MVNOs or alternative brands such as Boost Mobile (Sprint), Cricket Wireless (AT&T) and Wal-Mart Family Mobile (Tracfone). Other notable MVNOs offering lower rates are Lycamobile, ChatSIM, Ultra Mobile, US Mobile, RedPocket and TracFone.[22]

United Kingdom

The UK has over 20 MVNOs but all use one of the four coverage providers: EE, O2, Three and Vodafone.[23]

Regulation

In 2003, the European Commission issued a recommendation to national telecom regulators to examine the competitiveness of the market for wholesale access and call origination on public mobile telephone networks.[24] The study resulted in new regulations from regulators in several countries, including Ireland and France forcing operators to open up their networks to MVNOs.[25][26]

Jordan's top watchdog issued its first MVNO regulations in 2008, facilitating the creation of the first MVNO in the Arab world in 2010.[27]

The Saudi government is making preparations to permit MVNO services in the country.[28]

In Brazil, MVNOs are regulated by Anatel, the Brazilian Agency of Telecommunications, in November 2010. As of September 2014 the combined market share of all Brazilian MVNOs was just 0.04%.[29]

In Thailand, five MVNOs were given a Type II license to operate on the 2100 MHz 3G network of state telecom service TOT Public Company Limited (TOT) in 2009. As of January 2017, two of the original five MVNOs are still in service.[30]

In India, the Telecom Department under the Ministry of Communications and Information Technology, accepted a recommendation from the national telecom regulator, Telecom Regulatory Authority of India, to permit VNOs in the country, and announced the grant of a unified license for Virtual Network Operators on 31 May 2016.[31] VNOs have formed an association to represent current regulatory issues impacting their MVNO business viability.[32]

See also

References

  1. ↑ Allan Rasmussen (2007-02-09). "MVNO Definition". Yozzo.com. Retrieved 2017-07-04.
  2. ↑ Christian Borrman. "[https://www.gminsights.com/industry-analysis/mobile-virtual-network-operator-mvno-market-report Mobile Virtual Network Operator] - MVNO: MVNO Definitions". Mobile-virtual-network.com. Retrieved 2017-07-04. External link in |title= (help)
  3. ↑ Van Thanh, Do (2001). "Guest Editorial" (PDF). Telektronikk.
  4. 1 2 "GSM Paper" (PDF). Retrieved 2017-07-04.
  5. ↑ "An overview of the GSM system by Javier Gozalvez Sempere". Web.fe.up.pt. Retrieved 2017-07-04.
  6. ↑ Sasinovskaya, Olga. "Mobile Virtual Network Operators in Europe. Strategic and Legal Analysis".
  7. ↑ Allan T. Rasmussen. "The History of MVNO". Yozzo.com. Retrieved 2017-07-04.
  8. ↑ "Sense Communications buys GSM network capacity from Telia/Telenor Mobile". Telenor. 23 November 1999. Retrieved 23 July 2016.
  9. ↑ "COMPETITION POLICY IN TELECOMMUNICATIONS: THE CASE OF DENMARK" (PDF). International Telecommunication Union. 2002-11-01. Retrieved 2017-07-04.
  10. ↑ "Analysys Mason". Analysys Mason. 2011-06-28. Retrieved 2017-07-04.
  11. ↑ "Annual Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services" (PDF). Federal Communications Commission. 2008-02-01. Retrieved 2017-07-04.
  12. ↑ "MVNO Types and Operational Models". Yozzo.com. 2016-07-10. Retrieved 2017-07-04.
  13. ↑ "MVNO Classifications & Types". MVNO Dynamics. 2011-05-04. Retrieved 2017-07-04.
  14. ↑ GSMA Intelligence (12 June 2014). "GSMA Intelligence — Research — The global MVNO landscape, 2012–14". Retrieved 17 July 2015.
  15. ↑ "Report: Number of MVNOs exceeds 1,000 globally". FierceWireless. Retrieved 2017-07-04.
  16. ↑ "Report: Number of MVNOs exceeds 1,000 globally". FierceWireless. Retrieved 2018-06-11.
  17. ↑ "1 in 4 MVNOs upgraded to offering mobile broadband". Blycroft. 2011-05-31. Retrieved 2011-05-31.
  18. ↑ "These are Uganda's Mobile Virtual Network Operators (MVNOs)". Techjaja. 2015-03-13. Retrieved 2015-03-19.
  19. ↑ "2011 Annual Report and Analysis of Competitive Market Conditions with Respect to Mobile Wireless, including Commercial Mobile Services, WT Docket No. 10-133, Table 4 (Page 35): (1% of revenue per 1% of customers vs. 0.95% of revenue per 3.37% of customers) Service Provider Share of Subscribers and Revenues (Year-End 2009) based on John C. Hodulik, et al., U.S. Wireless 411, Version 37.0, UBS, UBS Investment Research, 7 September 2010 (U.S. Wireless 411 2Q10), based in turn on Company SEC 10-K filings" (PDF). 2011-06-27. Retrieved 2012-05-09.
  20. ↑ Olga Kharif (2016-02-04). "The Phone Companies People Actually Love". Bloomberg. Retrieved 2017-07-04.
  21. ↑ Segan, Sascha (2017-04-12). "The Best Cheap Cell Phone Plans You've Never Heard Of". PCMag.com. Retrieved 2017-07-04.
  22. ↑ "The Best Cheap Cell Phone Plans You've Never Heard Of". PCMAG. Retrieved 2016-10-18.
  23. ↑ "UK Mobile Coverage: Check & Compare Across Networks". kenstechtips.com.
  24. ↑ "Commission Recommendation of 11 February 2003 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communication networks and services (notified under document number C(2003) 497)". Erkki Liikanen, Commission of the European Communities. 11 February 2003. Retrieved 23 July 2016.
  25. ↑ "ComReg opens mobile networks to competition". The Irish Times. 9 December 2004. Retrieved 23 July 2016.
  26. ↑ "La lecture par l'Autorité de régulation des télécommunications de l'article L.1425-1". l’ARCEP. 7 December 2005. Retrieved 23 July 2016.
  27. ↑ "The right call: Mobile remains a sector highlight, while 3G access boosts demand". Oxford Business Group. January 2012. Retrieved 10 February 2016.
  28. ↑ "MVNOs signal change for Saudi telecoms | Saudi Arabia 2015". Oxford Business Group. 2015-03-30. Retrieved 2017-07-04.
  29. ↑ Marcelo Teixeira. "[https://www.gminsights.com/industry-analysis/mobile-virtual-network-operator-mvno-market-report MVNO Market] in Brazil". Tech in Brazil. Retrieved 17 July 2015. External link in |title= (help)
  30. ↑ Yozzo. "Another TOT MVNO hangs up". Yozzo.com. Retrieved 2017-09-14.
  31. ↑ "Guidelines for Grant of Unified License (Virtual Network Operators)" (PDF). The Ministry of Communications and Information Technology, India. 31 May 2016. Retrieved 23 July 2016.
  32. ↑ "Virtual Network Operators Association of INDIA". 31 August 2017.

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