MVNOs: A growing opportunity

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Mobile virtual network operators (MVNO), are wireless communication providers that do not own the underlying hardware and infrastructure. Rather, MVNOs tend to lease and obtain bulk access to mobile network operators (MNOs). With this model, MVNOs create lean businesses, and MNOs monetize unused bandwidth.

While the model is centred on utilization of unused bandwidth, it is also pertinent for MNOs in more than one way. In Korea, as an example, regulations forced operators to create sub-brands. Such sub-brands helped address specific niches and segments, and helped reduce churn, increase revenues (ARPUs), and ultimately the bottom line. Globally, this model has seen considerable success in Europe and China – both markets have upwards of ten MVNO brands.

MVNOs have the inherent ability to carve out niche or segmental offerings that will allow for considerable differentiation and value addition. The advent of new age technologies such as Internet of Things (IoT), Over and machine to machine (M2M) communication, are ideal use cases for creating segmental offerings. It can also help cater to consumer segments such as travellers, students and corporates, among others.

Enabling the model

The MNVO model is highly complex, and can be a challenge to manage. With multiple changes that range from regions, plans, brands, systems, providers, among others, MVNOs often need to rely on a robust mobile network virtual enabler (MNVE). Using enablers, MVNOs can:

  • Reduce CAPEX, lower OPEX
  • Augment support for processes
  • Decrease time to market for products and services
  • Increase agility and develop leaner operational models
  • Create scalable and flexible infrastructure
  • Experiment with new offerings with minimal effort and outlay of time and costs

Most MVNEs offer comprehensive customer experience that offers dynamic personalization and convergent billing. Further, MVNEs alleviate pain areas with legacy systems and offer platform migrations. With cloud coming into the fray, infrastructure can be deployed truly, virtually.

The road ahead

MNOs have a great opportunity in creating virtual offerings. Such offerings help address specific regions and market segments. Providers can also use these virtual offerings to pure play or MVNOs. Regardless of the approach the technology that will enable it will be paramount. Leveraging virtual networks require a paradigm shift wherein, functional needs trumps IT needs.

The MVNE market includes providers that offer nimble, agile and lean off-the-shelf offerings. And, it remains the prerogative of MNOs and MVNOs to effectively leverage them.

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