Mobile virtual network operator

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A mobile virtual network operator (MVNO), or mobile other licensed operator (MOLO) is a wireless communications services provider that does not own the 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.[1] An MVNO may use its own customer service, billing support systems, marketing and sales personnel or it may employ the services of a mobile virtual network enabler (MVNE).[2]

Background and history[edit]

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. For example, in Scandinavia, significant market power existed for early entrant mobile network operators. Regulators there concluded 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. The MVNOs in Scandinavia ended up having a market share above 10%.[citation needed]

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. 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.[citation needed] In some cases mobile network operators operate their own wholesale MVNO business unit to complement their retail model.

The first MVNO was created by Tele2 in Denmark, and subsequently rolled out in several European markets. This model formed the basis for the cooperation between Tele2 in Sweden and Telia, created when Telia failed to obtain a 3G license in their home market.

The first commercially successful MVNO in the United Kingdom was Virgin Mobile UK, which was launched in 1999.[3] This was followed 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.[4]


MVNOs worldwide[edit]

As of June 2014 there were 943 active MVNO's and 255 MNO sub-brands worldwide. This represents a total of almost 1,200 mobile service providers worldwide hosted by MNOs, up from 1,036 in 2012,[5] which in turn are operated by 503 companies (some companies operate multiple MVNOs in the same country).[6] The largest multi-country MVNO is Lycamobile, which operates in 17 countries.

MVNOs target both the consumer and enterprise markets. The majority of MVNOs are consumer-focused and most have a focus on price as their selling point; customers of major carriers spend about 3.4 times as much money on their service as MVNO customers.[7]

In addition to traditional cellular voice and messaging services, in 2014 120 MVNOs also offer mobile broadband services.[8] In Africa, Uganda has registered three MVNOs so far, some having their own network infrastructure within major cities, but act as MVNO out of the these cities. [9]

Light MVNO[edit]

Light MVNO, known also as reseller, White Label, or service provider model, refers to an MVNO which provides only marketing, and sometimes billing and provisioning. The MNO owns the MVNO SIM card. Such Light MVNO companies will often offer coupons, discounts and promotional codes to attract customers to buy the service through them.[10] Light MVNO is often run by mobile phone and computer shops since they have direct access to the customers.

Regulation[edit]

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 regulations from NRAs in several countries, including Ireland and France forcing operators to open up their network to MVNOs.

In the Middle East, Jordan's TRC has issued its first MVNO regulations in 2008 facilitating the entrance of the first MVNO in the region.

The Saudi government is making preparations to permit MVNO services in the country,[citation needed] and local mobile network operator, Mobily has awarded an MVNE management contract to India’s XIUS.[11]

In Brazil, the MVNO was regulated by Anatel, the Brazilian Agency of Telecommunications, in November 2010. As of September 2014 the combined market share of all Brazilian MVNOs was just 0.04%.[12]

See also[edit]

References[edit]

External links[edit]