Mobile

What is MVNO in Telecom?

Is your business looking for a mobile phone service partner for your operations? The mobile industry is highly segmented, the opposite of how straight-forward it seems to the average buyer. Understanding their world and the roles companies play is fundamental to choosing the right partner and getting the best deal.

A Mobile Virtual Network Operator (MVNO). In a nutshell, they sell mobile services, particularly minutes and data, sometimes including handset and accessories, to consumers. Similarly, other businesses, like MNOs (Mobile Network Operators), present the same benefits but are very distinct in major ways that are clearer internally.

The difference lies in the overall scope of each type of business. To answer the question, “What is MVNO in telecom?” we need to know the MNO, as well as the MNVA and MNVE, and how they relate to each other.

 

What is an MNO?

The main function of Mobile Network Operator (MNO) is to produce capacity for cellular transmission and data usage. Their primary responsibilities are limited to these:

  • Buying rights to the spectrum of radio waves from the government-appointed regulators.
  • Establishing the mobile network from the acquisition, to setting up, to testing equipment.
  • Creating and maintaining voice and data centres.

However, they may or may not span to include those below, depending on the company’s business model and any related legalities in the area:

  • Distribution of sim cards and mobile devices.
  • Providing consumers with other added services, namely customer support, billing, marketing and sales.

Whether they decide to include the last two mentioned in their business portfolio, MNOs can and, in some cases, do sell bandwidth in wholesale to other companies. Then they’re either sold directly to consumers or to other businesses that are also in the same trade. One of these kinds of businesses is called an MVNO.

 

What is MVNO in telecom?

When it comes to how they contrast from MNOs, the key is in the wireless network infrastructure. An MNO will always own one but an MVNO will never have this asset. The latter is technically a B2C (Business to Consumer) reseller. They’re marketed differently to suit their niche markets but they never produce their own.

Beyond that, what an MVNO offers varies, which lead to classifications between MVNOs. Notice that while they buy-and-sell mobile network utilization, not all are labelled as resellers. MVNO services involve:

  • Branded Resellers are those that only market to consumers and transact with them.
  • Second Brand or Skinny are MVNOs that handle the Marketing and Sales, Device Management, Billing & Correction, and Customer Service
  • Light or Thin MVNOs supply those plus Applications & (Related) Services
  • Full or Thick shoulder all listed, and include Interconnection, and Network Routing.

The only thing lacking from a Full MVNO from becoming an MNO is their own network. Reasons for not expanding to becoming an MNO vary but a big factor are the limitations set by the government. There are often restrictions to the spectrum, infrastructure and number of MNOs allowed operating. Because of that, rights to the first two are usually auctioned off.

A popular example of an MVNO is Virgin Mobile. It’s known to use bandwidth from Sprint. You’ll observe they offer the same performance in mobile signal and data. Because of the limitations preventing more MNOs, MVNOs are more common so your carrier is likely to be sharing its system with a competitor.

 

When Would an MNO Not Sell to Consumers?

Aside from choosing to focus on specific functions instead of having all in-house, an MNO could end up producing a higher capacity than their customers’ demands. In this situation, they either mark it as a loss or sell it to a third-party for a small profit, even if they’re competitors. T-Mobile and Verizon are both MNOs but they also sell surplus data and minutes to other industry players.

There are cases when an MNO decides not to entertain small MVNOs and would prefer to deal with larger companies. They’re either bigger MVNOs or MVNAs (Mobile Virtual Network Aggregators). MVNAs would buy these from the MNO and then offer services to the MVNOs, acting as middlemen.

An MNO may also decide to conduct business on all aspects of the virtual network to a Mobile Virtual Network Enabler (MVNE) exclusively. They’re called such because they allow for the creation and operation of smaller MVNOs.

Comprising the MVNEs customer base are MVNOs, MVNAs, and on rare occasions, direct customers. MVNEs also have special privileges such as allowing MVNAs to connect straight to the MNO’s wire. They also give additional support systems to MVNOs by outsourcing more back-end functions such as admin, billing, etc.

 

An advantage of having MVNAs and MNOs is encouraging competition in mobile operators, allowing customers a more diverse range when it comes to customer care, etc. However, features like data speed and signal quality are unaffected because they come from the same source. Also, the more layers in the chain, costs are driven up and so are prices.

Knowing the ecosystem of mobile services would allow your business to make a better-informed decision on the right telecom operator to partner with and have a more accurate expectation of the costs involved. Each provides its own unique advantages and disadvantages so its important to get to know how it works in your area.

Research on which brand names provide the signal, the sim card, the phone and more. Consult with a business that would guide you through with the right information, easing your process. Contact us today!

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Nikki B. Tampos

The author Nikki B. Tampos

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