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Mobile virtual network operator

An MVNO does not own its own network infrastructure, and simply uses an MNO's infrastructure.

A mobile virtual network operator (MVNO) is a wireless communications services provider that does not own the wireless network infrastructure over which it 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 could employ the services of a mobile virtual network enabler (MVNE).[2]

History

MVNO agreements with network operators date back to the 1990s, when the European and Australian telecom markets saw market liberalization, new regulatory frameworks, better 2G network technology, and a subsequent jump in wireless subscriber numbers.[3][4] Though the new 2G networks more efficiently managed the limited frequency bands allocated to wireless service, new mobile entrants were still limited by their ability to access frequency bands in a restricted spectrum.[5]

In 1997 Vodafone Australia and TotalTel launched FastFone, the world's first true prepaid MVNO utilising the worlds first fully MNO integrated MVNE platform supplied by Isoton (formerly Steadycom). FastFone's MVNO model was very successful, attracting more than 300,000 subscribers in 18 months. Vodafone purchased the business in 1999.

With European markets newly open to competition and new technology enabling better service and cheaper handsets, there was a massive surge in demand for cellular phones.[4] In the midst of this swell, Sense Communications fought for access to mobile network operator (MNO) spectrum in Scandinavia in 1997.[6] Sense was able to establish an MVNO agreement with Sonera in Finland, but it failed to persuade MNOs in Sweden, Denmark, and Norway.[7] Sense then appealed to EU regulators, citing provisions that required certain MNOs to allow new entrants interconnection. While Sense's claim was denied, in November 1999, the company signed a service provider agreement with Telia/Telenor Mobile for GSM network capacity access, allowing Sense to offer services to its own customers in Sweden and Norway.[8]

Despite Sense's initial failure, the regulator in Denmark saw the promise in the MVNO model as a cost-effective route for telecom companies to enter the market and in May 2000, legislation passed that required network operators with significant market power to open up access to their infrastructure.[9] By August of that same year, the MNO SONOFON had solidified the first viable MVNO agreement with Tele2. This agreement provided Tele2 with access to SONOFON's network for both mobile and roaming services, the latter of which had been requested by (and denied to) Sense Communications. With the new regulations in place, MVNOs in Scandinavia eventually grew to a market share of above 10%.[10]

By 2008, US wireless subscribers had a choice between around 40 MVNOs. According to the FCC, approximately 7% of all U.S. mobile subscribers were served by resellers, including MVNOs, and analysts found that the 15.1 million wireless subscribers served by resellers by the end of 2006 had increased by 1.6 million over the previous year.[11]

Types

MVNOs are distinguished by their commitment to owning and managing the operational components of the MVNO business model,[12] consisting of:

  • Access to basic network infrastructure, like base stations, transceivers, home location registers, and switching centres.
  • Service packaging, pricing, and billing systems, including value-added services like voicemail and missed call notifications.
  • Consumer-facing aspects like sales, marketing, and customer relationship management activities like customer care and dispute resolution.

Because MVNOs are effectively defined by their lack of spectrum licenses, an MVNO necessarily will need to have agreements in place to access the network of at least one MNO. The type of MVNO is determined by how "thick" or "thin" a technological layer an MVNO adds over its access to its host MNO's network.

Branded reseller

Sometimes referred to as a "Skinny MVNO", as the reseller almost totally relies on the MNO's facilities. They do not own any network elements, but may own and operate their own customer care, marketing, and sales operations.

Service Provider

Sometimes referred to as a "Light MVNO". The service provider operates its own customer support, marketing, sales and distribution operations, and has the ability to set its tariffs independently from the retail prices set by the MNO.

Enhanced Service Provider

Sometimes referred to as a "Thick MVNO". The MVNO manages a more complete technical implementation with its own infrastructure which allows the MVNO more control over its offerings. These MVNOs have a heavier focus on branding, customer-ownership, and differentiation through added services like data and SIM applications.

Full mobile virtual network operator

These MVNOs have a network implementation operating essentially the same technology as a mobile network operator. Full MVNOs only lack their own radio networks.[13]

Around the world

As of June 2014, 943 MVNOs and 255 MNO sub-brands were active worldwide. This represents a total of almost 1,200 mobile service providers worldwide hosted by MNOs, up from 1,036 in 2012,[14]

According to GSMA Intelligence, between June 2010 and June 2015, the number of MVNOs worldwide increased by 70 percent, reaching 1,017 in June 2015.[15]

As of December 2018, there were 1,300 active MVNOs operating in 80 countries, representing more than 220 million mobile connections—approximately 2.46% of the total 8.9 billion mobile connections in the world. The eight countries with the largest number of active MVNOs in 2018 were: the US with 139 MVNOs (4.7% market share), Germany with 135 (19.5% market share), Japan 83 (10.6%), UK 77 (15.9%), Australia 66 (13.1%), Spain 63 (11.5%), France 53 (11.2%) and Denmark 49 (34.6%).[16]

In addition to traditional cellular voice and messaging services, in 2014, 120 MVNOs also were offering mobile broadband services.[17] In Africa, Uganda has registered three MVNOs so far, some having their own network infrastructure within major cities, but acting as an MVNO out of these cities.[18]

In 2015, one of the "big five" banks in South Africa, FNB, created an MVNO named FNB Connect providing voice, SMS and data services. As of 31 December 2019, FNB Connect had around 670,000 subscribers. The service makes use of Cell C network infrastructure. The move came not necessarily to compete in the telecommunications market, but to offer a greater value to customers of the banking division.[19] There have been several banks in South Africa making this move, like Standard Bank's SB Mobile established in 2019.

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; on average, customers of major carriers spend about 3.4 times as much on their service as MVNO customers.[20]

At the end of year 2022, there were 1,986 active MVNOs globally, more than double the amount of traditional telecom network operators. Europe lead in terms of most active MVNOs in operation with 1,012, representing half of the total global MVNO market. It is followed by Americas with 379 MVNOs, Asia with 322, International with 131, Oceania with 84, Africa with 54 and Middle East with 5.[21]

Multinational MVNOs

Some MVNOs have a presence in multiple countries, either as subsidiaries, joint ventures, or through brand licensing agreements with local partners, including Lycamobile in 60 countries, Virgin Mobile in 14 countries, Lebara in 10 countries, CMLink in five countries, Tesco Mobile in four countries, Line Mobile in three countries, Aldi Talk in six countries, Kogan.com Mobile in two countries, and L-Mobi Mobile in two countries.

Japan

Japan has about 80 MVNO brands, and the market share of MVNOs is 12.2% in 2019. The total number of contractors is 22.3 million.[22][23][24]

United States

There are 139[when?] MVNO brands in the US, estimated to sell service to about 7 out of every 100 US wireless subscribers, representing 23 million customers. US MVNOs resell services offered by the three national network carriers: AT&T, T-Mobile, and Verizon. The number of MVNO customers doubled between 2009 and 2012 because the FCC set rules, easing the ability for customers to switch networks.[citation needed]

The three US national carriers have partial or full ownership of several large MVNO brands, such as Cricket Wireless (AT&T), Visible (Verizon) and Metro by T-Mobile (T-Mobile).[25]

United Kingdom

The UK had 77 active MVNOs as of December 2018. The MVNOs combined market share was 15.9% of the total UK mobile market, representing 15.3 million connections; that is, 23 out of every 100 subscribers having their mobile phone service with an MVNO.[26]

Ireland

Ireland has seven active MVNO brands as of February 2021, and the market share of MVNOs in 2022 is 13.4%.[27]

Vietnam

Vietnam currently has 6 MVNO providers as May 2024, mostly operating and relying on 2 main providers: VinaPhone and Mobifone. Thsese includes: |-SayMee |-Local |-FPT mobile |-WinTel |-iTel |-VNSky

Regulation

In 2003, the European Commission issued a recommendation to national telecom regulators to examine the competitiveness of the market for wholesale access and call origination on public mobile telephone networks.[28] The study resulted in new regulations from regulators in several countries, including Ireland and France forcing operators to open up their networks to MVNOs.[29][30]

Jordan's top watchdog issued its first MVNO regulations in 2008, facilitating the creation of the first MVNO in the Arab world in 2010.[31]

The Saudi government is making preparations to permit MVNO services in the country.[32]

In Brazil, MVNOs are 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%.[33]

In Thailand, five MVNOs were given a Type II license to operate on the 2100 MHz 3G network of state telecom service TOT Public Company Limited (TOT) in 2009. As of January 2017, two of the original five MVNOs are still in service.[34] As of December 2018, the National Broadcasting and Telecommunications Commission (NBTC) had issued 58 MVNO licenses in Thailand, a total of nine have launched, four remain active.[35]

In India, the Telecom Department under the Ministry of Communications and Information Technology, accepted a recommendation from the national telecom regulator, Telecom Regulatory Authority of India, to permit VNOs in the country, and announced the grant of a unified license for Virtual Network Operators on 31 May 2016.[36] VNOs have formed an association to represent current regulatory issues impacting their MVNO business viability.[37]

See also

References

  1. ^ Allan Rasmussen (9 February 2007). "MVNO Definition". Yozzo.com. Retrieved 4 July 2017.
  2. ^ "Mobile Virtual Network Enabler (MVNE)". Yozzo, Allan Rasmussen. 20 August 2022. Retrieved 18 February 2023.
  3. ^ Van Thanh, Do (2001). "Guest Editorial" (PDF). Telektronikk.
  4. ^ a b "GSM Paper" (PDF). Retrieved 4 July 2017.
  5. ^ "An overview of the GSM system by Javier Gozalvez Sempere". Web.fe.up.pt. Retrieved 4 July 2017.
  6. ^ Sasinovskaya, Olga. "Mobile Virtual Network Operators in Europe. Strategic and Legal Analysis".
  7. ^ Allan T. Rasmussen (31 July 2016). "The History of MVNO". Yozzo.com. Retrieved 4 July 2017.
  8. ^ "Sense Communications buys GSM network capacity from Telia/Telenor Mobile". Telenor. 23 November 1999. Retrieved 23 July 2016.
  9. ^ "COMPETITION POLICY IN TELECOMMUNICATIONS: THE CASE OF DENMARK" (PDF). International Telecommunication Union. 1 November 2002. Retrieved 4 July 2017.
  10. ^ "Analysys Mason". Analysys Mason. 28 June 2011. Archived from the original on 15 October 2018. Retrieved 4 July 2017.
  11. ^ "Annual Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services" (PDF). Federal Communications Commission. 1 February 2008. Retrieved 4 July 2017.
  12. ^ "MVNO Types and Operational Models". Yozzo.com. 10 July 2016. Retrieved 4 July 2017.
  13. ^ "MVNO Classifications & Types". MVNO Dynamics. 4 May 2011. Retrieved 4 July 2017.[dead link]
  14. ^ GSMA Intelligence (12 June 2014). "GSMA Intelligence — Research — The global MVNO landscape, 2012–14". Retrieved 17 July 2015.
  15. ^ "Report: Number of MVNOs exceeds 1,000 globally". FierceWireless. Retrieved 4 July 2017.
  16. ^ "The state of MVNO in 2018 – More than 1,300 active MVNOs in 80 countries". Yozzo, Allan Rasmussen. 25 December 2018. Retrieved 26 December 2018.
  17. ^ "1 in 4 MVNOs upgraded to offering mobile broadband". Blycroft. 31 May 2011. Retrieved 31 May 2011.
  18. ^ "These are Uganda's Mobile Virtual Network Operators (MVNOs)". Techjaja. 13 March 2015. Retrieved 19 March 2015.
  19. ^ Gilbert, Paula (18 March 2019). "FNB Connect sees strong growth". ITWeb. Retrieved 14 February 2022.
  20. ^ "2011 Annual Report and Analysis of Competitive Market Conditions with Respect to Mobile Wireless, including Commercial Mobile Services, WT Docket No. 10-133, Table 4 (Page 35): (1% of revenue per 1% of customers vs. 0.95% of revenue per 3.37% of customers) Service Provider Share of Subscribers and Revenues (Year-End 2009) based on John C. Hodulik, et al., U.S. Wireless 411, Version 37.0, UBS, UBS Investment Research, 7 September 2010 (U.S. Wireless 411 2Q10), based in turn on Company SEC 10-K filings" (PDF). 27 June 2011. Retrieved 9 May 2012.
  21. ^ "At the end of 2022 there were 1986 active MVNOs globally". Yozzo, Allan Rasmussen. 17 February 2023. Retrieved 18 February 2023.
  22. ^ "総務省|電気通信サービスの契約数及びシェアに関する四半期データの公表 (令和元年度第1四半期(6月末))". 総務省 (in Japanese). Retrieved 26 October 2019.
  23. ^ "Number of mobile phone subscribers". Telecommunications Carriers Association. Retrieved 13 September 2019.
  24. ^ "Change in the domestic MVNO market (March 2019)". MM Research Institute. 13 June 2019. Retrieved 13 September 2019.
  25. ^ "The Best Cheap Cell Phone Plans You've Never Heard Of". PCMAG. Retrieved 18 October 2016.
  26. ^ "The state of MVNO in 2018 – More than 1,300 active MVNOs in 80 countries". Yozzo, Allan Rasmussen. 25 December 2018. Retrieved 26 December 2018.
  27. ^ "Quarterly Key Data Report Q3 2022". Commission for Communications Regulation. 8 December 2022. Retrieved 2 January 2023.
  28. ^ "Commission Recommendation of 11 February 2003 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communication networks and services (notified under document number C(2003) 497)". Erkki Liikanen, Commission of the European Communities. 11 February 2003. Retrieved 23 July 2016.
  29. ^ "ComReg opens mobile networks to competition". The Irish Times. 9 December 2004. Retrieved 23 July 2016.
  30. ^ "La lecture par l'Autorité de régulation des télécommunications de l'article L.1425-1". l’ARCEP. 7 December 2005. Retrieved 23 July 2016.
  31. ^ "The right call: Mobile remains a sector highlight, while 3G access boosts demand". Oxford Business Group. January 2012. Retrieved 10 February 2016.
  32. ^ "MVNOs signal change for Saudi telecoms | Saudi Arabia 2015". Oxford Business Group. 30 March 2015. Retrieved 4 July 2017.
  33. ^ Marcelo Teixeira (23 September 2014). "MVNO Market in Brazil". Tech in Brazil. Retrieved 17 July 2015.
  34. ^ Yozzo (28 January 2017). "Another TOT MVNO hangs up". Yozzo.com. Retrieved 14 September 2017.
  35. ^ "MVNO license number 58 in Thailand". www.yozzo.com. 24 September 2018. Retrieved 24 September 2018.
  36. ^ "Guidelines for Grant of Unified License (Virtual Network Operators)" (PDF). The Ministry of Communications and Information Technology, India. 31 May 2016. Retrieved 23 July 2016.
  37. ^ "Virtual Network Operators Association of INDIA". 31 August 2017.

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