Mobile Virtual Network Operator Media Man Australia

Mobile Virtual Network Operator

A mobile virtual network operator (MVNO) is a company that provides mobile phone service 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. 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. Switchless resellers buy minutes wholesale from the large long distance companies and retail them to their customers.

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 Code Division Multiple Access (CDMA), GSM and the Universal Mobile Telecommunications System (UMTS).

The first commercially successful MVNO in the UK was Virgin Mobile UK, launched in the United Kingdom 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. Some MVNOs run their own Billing and Customer Care solutions known as BSS (Business Support Systems). Many use an MVNE.

There is a distinction between MVNOs and service providers. MVNOs refer to mobile operators who are not licensed radio frequency holders and lease radio frequency from MNOs in order to set up their mobile virtual networks. By these virtual networks they act similar as genuine MNOs in the sense that they can have their own SIM-cards which are different from the SIM-cards of the MNOs who lease those frequencies and they can also conclude interconnection agreements with MNOs or MVNOs. Based on their virtual networks they can either provides wholesale services to their retail arms, or sell wholesale services to mobile service providers. By contrast, service providers are companies that purchase wholesale mobile minutes and resell to end-users. Normally they do not have their own SIM-cards that are provided by their hosting MNOs or MVNOs. The services provided by service providers depend on the services of the hosting MNOs or MVNOs. In addition, interconnection of service providers is carried out by their hosting MNOs or MVNOs.

MVNOs Classification and Marketing strategies

* 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.

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. Countries including Algeria,The Netherlands, France, Denmark, United Kingdom, Finland, Belgium, Australia and United States have the most MVNOs. In these countries the MVNO marketplace is stabilizing and there are some well-known MVNO successes. Other countries, such as Portugal, Spain, Italy, Croatia, the Baltics, India, Chile 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.

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 misconception that MVNOs only target the consumer markets. Examples of a non-consumer MVNO being Wireless Maingate and white, M2M data based MVNOs. 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, rMVNO (roaming virtual networks), and MVNE (so-called Mobile Virtual Network Enabler). 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 in the USA or debitel in France).

One specific sector of MVNO operations focuses on international, or roaming Mobile Virtual Network Operators (rMVNO). These are distinct from domestic MVNO agreements and are intended to provide transparency of international tariffs.

According to Pyramid Research, 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.

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 Tyntec and Convergys.

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 won 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.

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. (Credit: Wikipedia).

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