Tailored for the telecommunications value chain
Different MVNO approaches
Technical advances, social trends, economic developments and political forces are continuing to change considerably the streamline concept of the telco value chain. Especially in the wireless arena new entrants are appearing as Mobile Virtual Network Operators (MVNOs) for the provision of mobile services using different business approaches based on technological scenarios. In the midst of these changes, carriers and new players should understand the basics, the feasibility and the implications of the MVNO model in order to design appropriately their medium and long term strategies. The winners emerging from this paradigm shift are definitely the end users.
MVNO in the mobile telecommunications value chain
A Mobile Virtual Network Operator, also known as an MVNO, is a company without a mobile network license which provides mobile telecommunication services and SIM cards to end users with a network code and under its own brand name, but which relies on a technical and commercial relationship with a host Mobile Network Operator (MNO) to gain access to the necessary radio network elements, spectrum and related services. At face value, the MVNO benefits from maintaining a flexible and almost independent business model and balances out its reliance on the Mobile Network Operator by investing in core network components and value added service platforms.
Unlike the mobile network operators and other telco players such as service providers and indirect access operators, the MVNO’s reliance to the mobile network operator’s (MNO’s) infrastructure can be restricted to some network elements and functions, while still obtaining total ownership of the end user. With regards to the mobile telecommunications value chain, the MVNO is thus emerging to introduce fundamental change into the traditional provisioning model of wireless voice and mobile data services. This business model provides a way of lessening the longstanding barriers to entry in the wireless industry. Hence, after the half-hearted launch attempts of the first MVNO companies in Western Europe in early 1998, and the valuable lessons learned from the various success stories and pitfalls, the business model is now gently gaining worldwide acceptance with the establishment of pan-continental and global MVNOs.
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