Mobile Virtual Network Operator

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A mobile virtual network operator is a company that does not own a licensed frequency spectrum, but resells wireless services under their own brand name, using the network of another mobile phone operator. The first successful was Virgin Mobile, launched in the United Kingdom in 1999. Before this, Sense attempted to start an MVNO service in the Scandinavian countries, but failed.

An MVNO's roles and relationship to the mobile phone operator vary by market. In general an MVNO is an entity or company that works independently of the operator and can set its own tariff structures. Usually, it does not own any GSM, CDMA or other wireless infrastructure, such as Mobile Switching Center (MSC) or a radio access network. Some may own their own Home Location Register(HLR), which allows more flexibility since multiple host networks could be used, and the MVNO appears as a roaming partner.

Contents

1 MVNOs Classification and Marketing strategies
2 MVNOs in the World
3 Legislation
4 List of MVNOs
5 External links

MVNOs Classification and Marketing strategies

Discount MVNOs provide cut-price call rates to market segments. Discount MVNOs include Fresh Mobile (the UK's cheapest MVNO for UK calls), MobileWorld (the UK's cheapest MVNO for dialling internationally), Virgin Mobile and EasyMobile. Their strategy is based on cheap prepaid or postpaid tariffs with basic voice and SMS services.
Lifestyle MVNOs focus on specific niche market demographics MVNOs such as Boost Mobile and AMP'D Mobile in the US, and Hello_MTV and ID&T Mobile in Europe market entirely to young users.

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 ARPU 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 200 planned or operational MVNOs world-wide. Countries like The Netherlands, Denmark, United Kingdom, Finland, Belgium, Australia and United States have the most MVNOs per country, whereas some are just beginning to launch active MVNO business models - like France, the Baltics and Austria. Where there are many MVNOs in a single country, it is difficult for new entrants as the overall marketplace is highly saturated.

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 observors believe that the market is evolving and that many MVNOs will become operators while others will fold or be bought.

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.

List of MVNOs

External links

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