Mobile virtual network operator


Mobile virtual network operator

A mobile virtual network operator (MVNO) is a company that provides mobile phone services but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service.[1] Conversely, a company that does have frequency allocation(s) and all the required infrastructure to run an independent mobile network is known simply as a mobile network operator (MNO). MVNOs are roughly equivalent to the "switchless resellers" of the traditional landline telephone market. An MNO that does not have a frequency spectrum allocation in a particular geographical region may operate as an MVNO in that region.

An MVNO's roles and relationship to the MNO vary by market, country, and the individual situations of the MNO and MVNO. In general, an MVNO is an entity or company that works independently of the mobile network operator and can set its own pricing structures that are subject to the rates agreed with the MNO. Usually, the MVNO does not own any GSM, CDMA, or other core mobile network related infrastructure, such as mobile switching centers (MSCs) or a radio access network. Some may own their own home location register, or HLR, which allows more flexibility and ownership of the subscriber's mobile phone number (MSISDN); in this case, the MVNO appears as a roaming partner to other networks abroad, and as a network within its own region. Some MVNOs run their own billing and customer care solutions known as business support systems (BSS). Many use a Mobile Virtual Network Enabler.

There is a distinction between MVNOs and service providers, who purchase wholesale mobile minutes and resell to end-users. Service providers generally do not have their own SIM cards, and the services they provide depend on the services of the hosting MNOs or MVNOs.[2]

Contents

Background and history

The emergence of the MVNO model in a market is often a result of one of two factors. Regulatory intervention designed to lower the barriers for market entry and ultimately increase competition or a strategic decision by an MNO looking to extend its existing operations and target niche or underserved segments through a second or perhaps multiple brands.

For some of the earlier markets that embraced the MVNO model, such as in the Scandinavia region, the regulatory authority sought to introduce the MVNO/wholesale model to drive competition into a market that was considered to involve significant market power which existed for early entrant MNO's in those countries. The regulatory perception was that the MVNO model would be a time efficient and cost effective route for telecoms companies to enter the market and therefore bring increased competition for the benefit of the consumer.

The efficiency is obtained by the nature of the MVNO business model, in that an MVNO doesn’t incur the significant capital expenditure on spectrum and infrastructure that an MNO does, nor does it have the time consuming task of rolling out extensive radio infrastructure. In many of the early markets the regulator forced Host Network Operators (HNO's) to open their network to a potential competitor. The situation created was one of a reluctant HNO[who?] which felt that it was being forced into a commercial relationship that would eventually have a negative impact on its revenues. This resistance presented a challenging operating environment for the MVNO, most notably with regard to negotiating the best wholesale deal possible.

Conversely and more recently many mobile network operators believe that there is merit in operating a wholesale MVNO business unit to complement their retail model. And have therefore either openly embraced potential MVNO partner or endeavored to launch their own branded MVNOs, which presented a more favorable environment for a potential MVNO.

The first commercially successful MVNO in the United Kingdom was Virgin Mobile UK,[3] launched in 1999 and currently has over 4 million customers in the UK[citation needed]. Virgin replicated its UK success through its US operation Virgin Mobile USA, which was acquired by Sprint Nextel for a total equity value of approximately USD$483 million.[4] However ventures in Australia have not been so successful, and failed in Singapore, albeit with a different strategy.

Initially, Virgin ran using a service provider model—essentially reselling capacity on T-Mobile.

The first MVNO was created by Tele2 in Denmark, and subsequently rolled out in several European markets. This model formed the basis between the co-operation between Tele2 in Sweden and Telia, created when Telia failed to obtain a 3G license in their home market.

MVNOs worldwide

As of May 2011 there are 645 active MVNO operations in the world, which in turn are operated by 515 companies (some companies operate multiple MVNOs in the same country).[5]

MVNOs target both the consumer and enterprise markets. Examples of a non-consumer MVNO being wireless maingate and white Machine-to-Machine (M2M) data-based MVNOs. However the majority of MVNOs are consumer-focused and most have a focus on price as their unique selling point.

120 MVNOs now offer mobile broadband services.[6]

Terminology

The industry is going through stages characterized by alphabet soup nomenclature, including MVNO, roaming mobile virtual networks operators (rMVNO), and mobile virtual network enabler (MVNE). Most industry observers believe that over time, consolidation will take place on the market, while others will go out of business (examples are Disney Mobile and Helio in the USA and easyMobile in Europe).

One specific sector of MVNO operations focuses on international, rMVNOs. These are distinct from domestic MVNO agreements and are intended to provide transparency of international tariffs.

According to Bearfly, there are three main categories of MVNEs, according to their MVNO solutions:

Aggregator MVNEs
these offer consulting and integration services and have bundled all of the back-office network components through alliances. These promote their ability to quickly provide order-to-cash solutions to MVNOs. Companies include Ztar and TMNG.
Aggregator MVNEs with their own platforms
this includes aggregators which have developed one or more back-office solutions internally, and have complemented them with partnerships to provide end-to-end enablement services. Companies include Cognatel, aql, Martin Dawes Systems,Telogic Teleena, Transatel, ASPIDER Solutions, Effortel, Qualution, 6GMOBILE, Elephant Talk, and Baraka Telecom in Asia.
Specialised enablers
these offer only parts of the back-office network such as messaging platforms, data platforms and billing solutions. They are not solely focused on the MVNO market. Companies include Teleena, Cognatel, Transatel, ASPIDER Solutions, Elephant Talk, txtNation, Tyntec, 6GMOBILE, LogicStar, Convergys, and Baraka Telecom in Asia.

The voice-centric, operationally light MVNOs of today have generally worked with an aggregator MVNE that managed the limited back-end operations on behalf of the MVNO. The new breed high-end, strong brand MVNO is transforming the dynamics of the MVNE market. Besides leveraging their own existing assets, they choose to own more of their platforms, particularly their logistics, distribution and customer care systems. They still work with MVNEs, but they tend to opt for specialised ones with best-of-breed solutions and a strong reputation.

Exploiting the wireless IP networks competing infrastructure bandwidth with low traffic due to the lack of Mobile Driven Content, such as GPRS, EVDO, along with specific domain knowledge software applications with specific content, other Global Service or specialized application based MVNO are also growing.

These companies are pushing their own business model as content driven MVNO. They usually host their services in one location, and provide access to their content in different countries via specialized Mobiles and existing IP coverage.

MVNO classification

Business MVNOs
like BeyondMobile and Abica provide bespoke services to businesses.
Discount MVNOs
provide cut-price call rates to market segments.
Lifestyle MVNOs
like Helio focus on specific niche market demographics.
Advertising-funded MVNOs
like Blyk or MOSH Mobile build revenues from advertising to give a set amount of free voice, text, and content to their subscribers.
Ethnic MVNOs
like Lebara iCard Mobile Globalcell Mobile and Dialog Vizz who target ethnic communities by providing inexpensive calls to their home country.

Mobile operators and MVNOs

There are three primary motivations for mobile operators to allow MVNOs on their networks. These are generally:

Segmentation-driven strategies
mobile operators often find it difficult to succeed in all customer segments. MVNOs are a way to implement a more specific marketing mix, whether alone or with partners and they can help attack targeted segments.
Network utilisation-driven strategies
Many mobile operators have capacity, product, and segment needs–especially in new areas like 3G. An MVNO strategy can generate economies of scale for better network utilisation.
Product-driven strategies
MVNOs can help mobile operators target customers with specialised service requirements and get to customer niches that mobile operators cannot get to.

MVNO models mean lower operational costs for mobile operators (billing, sales, customer service, marketing), help fight churn, grow average revenue per user by providing new applications and tariff plans and also can help with difficult issues like how to deal with fixed-mobile convergence by allowing MVNOs to try out more experimental projects and applications. The opportunity for mobile operators to take advantage of MVNOs generally outweighs the competitive threat.

Understanding the MVNO value chain

Mobile network operator (MNO)
The traditional MNO is characterised by having their own mobile license, their own mobile infrastructure and direct customer relationship to the end user. The MNO can handle Network Routing and will usually have roaming deals with foreign MNOs. The MNO can produce and distribute for example voice-minutes, SMS and MMS messaging and data traffic themselves. The MNO can typically handle customer service, invoicing and collect consumption data and handle handset management themselves. Additionally the MNO will usually handle marketing and sales to end users themselves.
Mobile network enabler (MNE)
An MNE is characterised by having their own mobile licence and own mobile infrastructure, but the MNE has - unlike the MNO - no direct customer relationship with the end user. It is therefore only an MNO that can establish themselves as an MNE. The MNE is capable of handling Network Routing themselves and the MNE will typically have roaming deals with foreign MNOs. The MNE is able to produce and distribute for example voice minutes, SMS and MMS messages and data traffic. The MNE will typically be able to handle customer relationship, customer billing and collection of consumption data and mobile handset management. The MNE will not handle marketing and sales to end-users, this is a task for the MNE's wholesale customers. The MNE handles the technical side of the business and often also handles areas like customer service and legal assistance for mobile providers without their own network.
Mobile virtual network enabler (MVNE)
MVNEs are characterised by neither having a mobile licence nor mobile infrastructure or any direct customer relationship with the end-users. The MVNE is capable of handling Network Routing and the MVNE has typically entered into roaming deals with foreign MNOs. The MVNE is not capable of producing and distributing for example voice minutes and data traffic, but the MVNE will typically be able to handle producing SMS and MMS messages. A typical MVNE will handle customer service, customer billing, collection of consumption data and mobile handset management. Additionally the MVNE will not handle marketing and sales to end-users, this is a task for the MVNE's wholesale customers. The MVNE functions as a middleman between the MNO and the mobile providers without their own networks. The MVNE handles the technical side and often also tasks like customer service and legal assistance for mobile providers without their own network.
Mobile virtual network operator (MVNO)
An MVNO is characterised by neither having their own mobile licence nor own mobile infrastructure, but the MVNO has the direct customer relationship with the end user. The MVNO is able to handle Network Routing themselves and will typically have entered into roaming deals with foreign MNOs. The MVNO is often able to produce and distribute for example voice minutes and data traffic, typically by tagging onto their existing fixed line operation, and the MVNO will typically be able to handle producing SMS and MMS messages. A typical MVNO will be able to handle customer service, customer billing and collection of consumption data and handset management. Furthermore the MVNO will usually handle marketing and sales to end-users them self.
Private virtual network operator (PVNO)
A PVNO is a concept that describes a full MVNO (own SIM/IMSI range) that does not offer services to the public. The PVNO has come about due to the particular challenges faced by businesses such as utilities that require a large number of machine to machine connections but where using the operators SIM's is likely to create undue commercial risk or "Lock-in". For example in the case of a utility with millions of electricity meters on end points the costs of a SIM swap in each of these devices creates a big barrier to entry for a competing operator and in so doing creates a commercial risk that the incumbent operator is in a very strong position to negotiate subsequent price increases. There are advantages to the PVNO model for operators and regulatory bodies too. For example just as a Utility can suffer "Lock-in" the loosing operator can be “Locked-out”. As the network is private, a private numbering range could be used, thus avoiding the use of valuable national resources. The PVNO concept was 1st presented at the Telecoms for Smart Grids conference in London in September 2011.
Mobile shared spectrum enabler (MSSE)
The MSSE has no mobile infrastructure of its own, but is a technology provider that uses innovative hardware and software to enable MVNOs to create their own actual mini-networks, while preserving and enhancing the relationship between MVNO and MNO. Using its agreement with the MNO, and operating within the MNO's spectrum license, the MSSE helps the MVNO to deploy its own network of low-power base-stations into areas the MNO could not justify, using Pico- and Femto-cell technologies. There is no impact on the MNO's mainstream network and it can, if it chooses, extend the reach of the its network at no cost, while the MVNO can improve its profitability by offering specialist and niche mobile solutions.
Service provider (SP)
An SP has neither a mobile licence nor own mobile infrastructure, but the SP has the direct customer relationship with the end user. An SP is not able to handle Network Routing themselves and a SP will not enter into roaming deals with foreign MNOs. The SP is not able to produce and distribute for example voice minutes and data traffic and cannot produce SMS or MMS messages themselves. The SP will typically handle customer relationship, customer billing consumption data and handset management themselves. Additionally, the SP will typically handle their own marketing and sales to end-users.
Branded reseller (BR)
A BR has neither a mobile licence nor own mobile infrastructure, but has the direct customer relationship to end-users. The BR cannot handle Network Routing themselves and the BR will not enter into roaming deals with foreign MNOs. The BR cannot produce and distribute for example voice minutes and data traffic themselves and are not able to produce SMS or MMS messages. A typical BR will not handle customer service, customer billing or collection of consumption data and handset management themselves. The BR will primarily concentrate their activities around marketing and sales to end-users. The BRs' positive contribution to the value chain is (naturally) their "brand", but their distribution power will also be a central asset for many Branded Resellers.

MVNO models and value chain

As such, there are several models of MVNO, and the vocabulary must be technical in order to split the different models.

Full MVNO On-Brand

  • The MVNO has all the full-scale operator technology of a mobile operator (including own SIM Card, own subscriber provisioning, own billing, and own roaming agreement).
  • IMSIs are from MVNO for national call (with its Mobile Network Code in the country) and roaming agreement is negotiated with a roaming partner. This partner allocate a specific IMSI range, and manage the IMSI translation between national and roaming cases.
  • Interconnect, IMSI, AuC, MNP, MSISDN, @IP allocation and APN numbers are arranged by MVNO
  • The MVNO own in the country national Point Code, and have an independent SCCP layer compared to external mobile network (MNOs or roaming)
  • The MVNO can arrange interconnection agreement with one or several MVNO(s) on a "traffic wholesale" model (this traffic can be qualified by the MVNO for voice/data/SMS/MMS)
  • The MVNO can negotiate specific and direct interconnection agreement with any carrier, or other mobile/fixed operator based on "traffic wholesale" model.
  • The MVNO is able to route and bill "on-net" call. The Host-MNO is seen as a utility in order to initiate a national mobile originating call without host-MNO Intelligent Network triggering
  • The MVNO numbering plan is completely independent from the MNO numbering plan.
  • The MVNO can be extended in future as MNO, or mobile shared spectrum enabler (MSSE)

This model is the most independent full MVNO model, the MVNO own its SIM card, and core network elements (MSC, HLR, GGSN). The MVNO is as such as possible independent from the host-MNO, in order to control traffic and subscriber services.

Example : 6GMOBILE (The Netherlands) aql (UK)

Full MVNO Basic

  • The MVNO has all the full-scale operator technology of a mobile operator (including own SIM Card, own subscriber provisioning, own billing, and own roaming agreement).
  • IMSIs are from MVNO for national call (with its Mobile Network Code in the Country)and Roaming agreement is negotiated with a roaming partner. This partner allocate a specific IMSI range, and manage the IMSI translation between national and roaming cases.
  • Interconnect, IMSI, AuC, MNP, MSISDN, @IP allocation and APN numbers are arranged by MVNO
  • The MVNO own in the country National Point Code, and have an independent SCCP layer compared to external mobile network (MNOs or roaming)
  • The MVNO can not arrange interconnection agreement with one or several MVNO(s) on a "traffic wholesale" model (this traffic can not be qualified by the MVNO for Voice/Data/SMS/MMS)
  • The MVNO can negotiate specific and direct interconnection agreement with any carrier, or other mobile/fixe operator based on "traffic wholesale" model.
  • The MVNO is not able to route and bill "on-net" call. The Host-MNO is yet controlling a national mobile originating call via Intelligent Network triggering.
  • The MVNO numbering plan is not completely independent from the MNO numbering plan.
  • The MVNO can not be extended in future as MNO, or Mobile shared spectrum enabler (MSSE)

Example : KPN Spain, Telecable (Spain)

Full MVNO Mono-IMSI

  • The MVNO has all the full-scale operator technology of a mobile operator (including own SIM Card, own subscriber provisioning, own billing), but not its own roaming agreement.
  • IMSIs are from one and only one host operator MNO and thus roaming service.
  • Interconnect, IMSI are arranged by host operator MNO
  • MNP, AuC, @IP allocation and APN numbers are arranged by MVNO
  • MSISDN can be arranged by MVNO or host operator MNO
  • The MVNO own in the country National Point Code, and have an independent SCCP layer compared to external mobile network (MNOs or roaming)
  • The MVNO can not arrange interconnection agreement with one or several MVNO(s) on a "traffic wholesale" model (this traffic can not be qualified by the MVNO for Voice/Data/SMS/MMS)
  • The MVNO can negotiate specific and direct interconnection agreement with any carrier, or other mobile/fixe operator based on "traffic wholesale" model.
  • The MVNO is not able to route and bill "on-net" call. The Host-MNO is yet controlling a national mobile originating call via Intelligent Network triggering.
  • The MVNO numbering plan is not completely independent from the MNO numbering plan.
  • The MVNO can not be extended in future as MNO, or Mobile shared spectrum enabler (MSSE)

Complete or extended MVNO

  • The MVNO has all the full-scale operator technology of a mobile operator (including own SIM Card, own subscriber provisioning, own billing), but not its own roaming agreement.
  • IMSIs are from one and only one host operator MNO and thus roaming service.
  • Roaming agreement is negotiated by Host-MNO.
  • Interconnect, IMSI, MNP, are arranged by host operator MNO
  • AuC, @IP allocation and APN numbers are arranged by MVNO
  • MSISDN can be arranged by MVNO or host operator MNO
  • The MVNO have not an independent SCCP layer compared to external mobile network (MNOs or roaming), and can be seen as an extension of the host-MNO
  • The MVNO can not arrange interconnection agreement with one or several MVNO(s) on a "traffic wholesale" model (this traffic can not be qualified by the MVNO for Voice/Data/SMS/MMS)
  • The MVNO can not negotiate specific and direct interconnection agreement with any carrier, or other mobile/fixe operator based on "traffic wholesale" model.
  • The MVNO is not able to route and bill "on-net" call. The Host-MNO is yet controlling a national mobile originating call via Intelligent Network triggering.
  • The MVNO numbering plan is not completely independent from the MNO numbering plan.
  • The MVNO can not be extended in future as MNO, or Mobile shared spectrum enabler (MSSE)

Medium MVNO

  • The MVNO has not all the full-scale operator technology
  • IMSIs are from one and only one host operator MNO and thus roaming service.
  • Interconnect, IMSI, MNP are arranged by host operator MNO
  • AuC, @IP allocation and APN numbers are arranged by MVNO
  • MSISDN can be arranged by MVNO or host operator MNO
  • The MVNO have not an independent SCCP layer compared to external mobile network (MNOs or roaming), and can be seen as an extension of the host-MNO
  • The MVNO can not arrange interconnection agreement with one or several MVNO(s) on a "traffic wholesale" model (this traffic can not be qualified by the MVNO for Voice/Data/SMS/MMS)
  • The MVNO can not negotiate specific and direct interconnection agreement with any carrier, or other mobile/fixe operator based on "traffic wholesale" model.
  • The MVNO is not able to route and bill "on-net" call. The Host-MNO is completely controlling mobile calls via Intelligent Network triggering.
  • The MVNO numbering plan is not completely independent from the MNO numbering plan.
  • The MVNO can not be extended in future as MNO, or Mobile shared spectrum enabler (MSSE)

This is Complete MVNO without any routing capabilities (no MSC in the MVNO network). The MVNO owns HLR and IN, and partially the subscriber provisioning.

IN MVNO

  • The MVNO has not all the full-scale operator technology
  • IMSIs are from one and only one host operator MNO and thus roaming service.
  • Interconnect, IMSI, MNP, Auc, @IP allocation and APN numbers are arranged by host operator MNO
  • MSISDN can be arranged by MVNO or host operator MNO
  • The MVNO have not an independent SCCP layer compared to external mobile network (MNOs or roaming), and can be seen as an extension of the host-MNO
  • The MVNO can not arrange interconnection agreement with one or several MVNO(s) on a "traffic wholesale" model (this traffic can not be qualified by the MVNO for Voice/Data/SMS/MMS)
  • The MVNO can not negotiate specific and direct interconnection agreement with any carrier, or other mobile/fixe operator based on "traffic wholesale" model.
  • The MVNO is not able to route and bill "on-net" call. The Host-MNO is completely controlling mobile calls via Intelligent Network triggering.
  • The MVNO numbering plan is not completely independent from the MNO numbering plan.
  • The MVNO can not be extended in future as MNO, or Mobile shared spectrum enabler (MSSE)

This is Medium MVNO without any routing capabilities (no MSC, no HLR in the MVNO network). The MVNO owns only IN. The MNO owns the MVNO SIM Card.

Example : Fastweb (Italy), R (cable operator) (Spain), KPN France, Transatel (France), Effortel

Diameter MVNO

  • The MVNO has not all the full-scale operator technology
  • IMSIs are from one and only one host operator MNO and thus roaming service.
  • Interconnect, IMSI, MNP, Auc, @IP allocation and APN numbers are arranged by host operator MNO
  • MSISDN can be arranged by MVNO or host operator MNO
  • The MVNO have not an independent SCCP layer compared to external mobile network (MNOs or roaming), and can be seen as an extension of the host-MNO
  • The MVNO can not arrange interconnection agreement with one or several MVNO(s) on a "traffic wholesale" model (this traffic can not be qualified by the MVNO for Voice/Data/SMS/MMS)
  • The MVNO can not negotiate specific and direct interconnection agreement with any carrier, or other mobile/fixe operator based on "traffic wholesale" model.
  • The MVNO is not able to route and bill "on-net" call. The Host-MNO is completely controlling all mobile calls and Intelligent Network triggering.
  • The MVNO numbering plan is not completely independent from the MNO numbering plan.
  • The MVNO can not be extended in future as MNO, or Mobile shared spectrum enabler (MSSE)

This is IN MVNO without any charging capabilities (no MSC, no HLR in the MVNO network). The MVNO owns only Rating capabilities via Host-MNO Diameter oriented interfaces. The MNO owns the MVNO SIM Card.

Example : Sisteer (France)

Light MVNO

  • The MVNO has not all the full-scale operator technology
  • IMSIs are from one and only one host operator MNO and thus roaming service.
  • Interconnect, IMSI, AuC, MNP, @IP allocation and APN numbers are arranged by host operator MNO
  • MSISDN can be arranged by MVNO or host operator MNO
  • The MVNO have not an independent SCCP layer compared to external mobile network (MNOs or roaming), and can be seen as an extension of the host-MNO
  • The MVNO can not arrange interconnection agreement with one or several MVNO(s) on a "traffic wholesale" model (this traffic can not be qualified by the MVNO for Voice/Data/SMS/MMS)
  • The MVNO can not negotiate specific and direct interconnection agreement with any carrier, or other mobile/fixe operator based on "traffic wholesale" model.
  • The MVNO is not able to route and bill "on-net" call. The Host-MNO is completely controlling all mobile calls and Intelligent Network triggering.
  • The MVNO numbering plan is not completely independent from the MNO numbering plan.
  • The MVNO can not be extended in future as MNO, or Mobile shared spectrum enabler (MSSE)

Known also as reseller or service provider model. The MVNO owns only marketing, and sometimes billing and provisioning. The MNO owns the MVNO SIM Card.

Legislation

Presently many companies and regulatory bodies are strongly in favour of MVNOs. For example, in 2003, the European Commission issued a recommendation to national telecom regulators (NRAs) to examine the competitiveness of the market for wholesale access and call origination on public mobile telephone networks. The study resulted in new legislation from NRAs in countries like Ireland and France forcing operators to open up their network to MVNOs. In the Middle East, Jordan's TRA has issued its first MVNO regulations in 2008 facilitating the entrance of the first MVNO in the region. In Brazil, the MVNO was regulated by Anatel, the Brazilian Agency of Telecommunications in November 2010.

See also

References


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