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A mobile virtual network operator (MVNO) is a wireless communications services provider that does not own the radio spectrum or wireless network infrastructure over which the MVNO 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. An MVNO may use its own customer service and billing support systems and its own customer service, marketing and sales personnel or it may employ the services of a Mobile Virtual Network Enabler (MVNE).^[1]

Background and history[link]

The emergence of the MVNO model in various markets worldwide varied based on local factors. In some markets, the MVNO concept came about as the result of regulatory intervention. Regulators wished to force established mobile network operators to offer wholesale access to their network to ensure robust competition to benefit the consumer. In other markets, mobile network operators responded to market opportunities to offer their excess capacity at wholesale rates to other entities in an effort to bring in incremental revenue on what would otherwise be unused network capacity. Mobile network operators believed that savings from not providing customer service and marketing would offset any revenue lost by selling network access at wholesale rates.

For some of the earlier markets that embraced the MVNO model, such as in Scandinavia, the regulatory authorities sought to introduce the MVNO model to drive competition into a market that was considered to involve significant market power which existed for early entrant mobile network operators in those countries. Regulators believed 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 MVNOs in Scandinavia ended up having a market share above 10%.

The efficiency is obtained by the nature of the MVNO business model. An MVNO incurs no significant capital expenditure on spectrum and infrastructure and does not have the time-consuming task of building out extensive radio infrastructure.

Certain 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 MVNO.

The first commercially successful MVNO in the United Kingdom was Virgin Mobile UK, launched in 1999.^[2] Virgin Mobile UK currently has over 4 million customers in the UK.^{[citation needed]}. The success of Virgin Mobile UK was replicated by the United States licensee of the Virgin Mobile brand. Initially an independent company, Virgin Mobile USA was eventually acquired by its host mobile network operator, Sprint Nextel, for approximately US$483 million.^[3]

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[link]

As of May 2011 there are 645 active MVNO operations worldwide, which in turn are operated by 515 companies (some companies operate multiple MVNOs in the same country).^[4]

MVNOs target both the consumer and enterprise markets. The majority of MVNOs are consumer-focused and most have a focus on price as their unique selling point; customers of major carriers spend about 3.4 times as much money on their service as MVNO customers.^[5] However, there are non-consumer MVNO ventures including Maingate and white machine-to-machine (M2M) data-based MVNOs.

In addition to traditional cellular voice and messaging services, 120 MVNOs now also offer mobile broadband services.^[6]

Terminology[link]

This unreferenced section requires citations to ensure verifiability.

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.

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.

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 enabling services. Companies include Cognatel, aql, Martin Dawes Systems,Telogic Teleena, Transatel, ASPIDER Solutions, Plintron, 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.

MVNO classification[link]

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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 Lycamobile, Lebara, iCard Mobile, Globalcell Mobile and Dialog Vizz who target ethnic communities by providing inexpensive calls to their home country.

Data MVNOs

focusing on selling data subscriptions to end users, for instance Amazon or Dell in Japan

Mobile operators and MVNOs[link]

This unreferenced section requires citations to ensure verifiability.

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[link]

This unreferenced section requires citations to ensure verifiability.

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 losing 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 term PVNO originates with Ericsson,^[7] the concept however was discussed in-depth in a study by Logica for the Dutch government^[8] and in an OECD study on Machine to Machine communication.^[9]

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[link]

This unreferenced section requires citations to ensure verifiability.

This section uses abbreviations that may be confusing or ambiguous. Specific concerns may be found on the Talk page. Please improve this section if you can. (July 2011)

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[link]

This unreferenced section requires citations to ensure verifiability.

• 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[link]

This unreferenced section requires citations to ensure verifiability.

• 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[link]

This unreferenced section requires citations to ensure verifiability.

• 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[link]

This unreferenced section requires citations to ensure verifiability.

• 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[link]

This unreferenced section requires citations to ensure verifiability.

• 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[link]

This unreferenced section requires citations to ensure verifiability.

• 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[link]

This unreferenced section requires citations to ensure verifiability.

• 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[link]

This unreferenced section requires citations to ensure verifiability.

• 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[link]

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[link]

• MVNE
• VNO
• List of United States MVNO
• List of United Kingdom MVNO
• Competitive local exchange carrier (CLEC)

References[link]

• Understanding MVNOs
• ZyAir Wireless