Mobile virtual network enabler

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A mobile virtual network enabler (MVNE) [1][2][3] is a company that provides network infrastructure and related services, such as Network Sub systems, Business Support Systems, provisioning, administration and Operations Support Systems to mobile virtual network operators (MVNOs). This enables MVNOs to offer services to their own customers with their own brands. The MVNE does not have a relationship with customers, rather provider of network enablement platform and services. An MVNE is a business-to-business operation that provides services to MVNOs and sometimes to mobile network operators for their wholesale. Aspiring MVNOs are becoming more aware of the function and potential benefits of using an MVNE. Network operators' recognition of the role of MVNEs within their wholesale portfolios is underscored by recent agreements.

MVNEs specialise in planning, implementation and management of mobile services on behalf of an MVNO. Typically, this means SIM provisioning and configuration, customer billing, customer relationship management and value-added service platforms. In effect, they enable an MVNO to outsource both the initial integration with the host operator and the ongoing business and technical operations management. MVNE is a telecom solution, whereas MVNA is a business model which include wholesale of an operator's airtime and routeing of traffic over the MVNE's own switch. MVNO contracts MVNA to launch new services with their own brands, with faster to market and capital cost.

The benefits of using MVNE/A includes reduction in MVNOs' upfront capex owing to the MVNE's pre-existing platforms, financing arrangements offered by MVNEs to cover start-up costs, reduced wholesale airtime costs achieved through economies of scale of hosting multiple MVNOs on a single MVNE platform. The other benefits could be reduced opex (e.g. headcount) by outsourcing management of business and technical operations, smoother launch process, benefitting from previous experience of MVNE a negotiating channel for smaller MVNOs to reach a wholesale agreement with the host operator.

However, not all MVNEs are the same, there is significant variation in the level of experience, technical capability, integration and operational support. Furthermore, using an MVNE may not be appropriate for all MVNOs. The considerations for this decision are manifold, however, some of the key reasons against using an MVNE are:

  • The MVNO is large enough to achieve volume efficiency when going direct to the host operator (usually several hundred thousand subscribers)
  • The brand and distribution channels are sufficiently strong to negotiate a joint-venture or direct relationship and obtain better margins.
  • The MVNO has access to existing telecoms infrastructure, for example, switches, international capacity, fixed infrastructure, billing platforms.

Adoption of the MVNE/MVNA model will have a significant impact on the margins of an MVNO business, acting either to improve or shrink these margins relative to direct or self-build models. As such, the decision to use an MVNE should not be taken lightly as the impacts could range from customer experience to business efficiency. The critical success factors for MVNO depends not just on MVNE but also MNO, MVNO financial strength, reach and host of other factors.[4]

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