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An MNO that does not have a frequency spectrum allocation in a particular geographical region may operate as an MVNO in that region. MVNOs can operate using any of the mobile technologies MNOs use, such as in 1999 and now has over 4 million customers in the UK. Its success was replicated in the US, but ventures in Australia have not been so successful, and failed in Singapore, albeit with a different strategy.

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, 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. However, MVNOs do tend to own or run their own Billing and Customer Care solutions, referred to as BSS (Business Support Systems).


MVNOS CLASSIFICATION AND MARKETING STRATEGIES


  • Discount MVNOs provide cut-price call rates to market segments. Discount MVNOs include Fresh Mobile, MobileWorld, Page Plus, and Virgin Mobile . Their strategy is based on cheap prepaid or postpaid pricing plans with basic voice and SMS services.

  • Lifestyle MVNOs focus on specific niche market demographics. MVNOs such as Helio , Boost Mobile and AMP'D Mobile in the US, and Hello_MTV and ID&T Mobile in Europe market entirely to young users, while Disney Mobile markets their services to families with children.


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 specific, 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.


MVNOS IN THE WORLD


There are currently approximately 360 planned or operational MVNOs world-wide according to consultancy firm Takashi Mobile , which has been advising MVNOs since 1999. Countries including The Netherlands , France , Denmark , United Kingdom , Finland , Belgium , Australia and United States have the most MVNOs. In these countries the MVNO marketplace is stablizing and there are some well-known MVNO successes. Other countries, such as Portugal , Spain , Italy the Baltics and Austria are just beginning to launch MVNO business models. Where there are many MVNOs in a single country, it is difficult for new entrants as the overall marketplace is highly saturated.

On 13th Nov 2006 Blycroft Publishing announced that there were roughly 230 active MVNOs, as of June 2006. The MVNOs contained within their MVNO market study vary from consumer driven MVNOs to enterprise and data focused operations. It is a common misbelief that MVNOs only target the consumer markets. An example of a non-consumer MVNO being Wireless Maingate , an M2M data based MVNO. It is correct that the majority of MVNOs are consumer focused and most have a focus on price sensitivity as their unique selling point. It is now widely thought that the future development of MVNOs as an industry is within enterprise market developments and M2M markets.


MVNO, MVNE AND BEYOND


The industry is going through stages characterized by alphabet soup nomenclature, including MVNO and MVNE (so-called Mobile Virtual Network Enabler). Most industry observers believe that the market is evolving and that many MVNOs will become MNOs, while others will go out of business or be acquired.


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 that forces operators to open up their network to MVNOs.


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