Mobile virtual network operator
MVNO or Mobile Virtual Network Operator are smaller companies to which big cellular companies starts agreements and gives sublease with a license for reselling cellular services to interior markets. MVNOs are the smaller companies that do not own a networking infrastructure nor have its own licensed frequency allocation of radio spectrum. These wireless services are sold by the MVNO under their own brand name but use the normal telecom operator with which they are under contract. From the licensed telecom operator the MVNOs buy minutes and then sell them again to the customers of MVNO. The emergence of MVNO is fast in Europe. USA is also seeing a beginning of entrance of MVNOs. The phenomenon of MVNO is slowly catching up in Asia and other parts also.
An example of MVNO is Virgin Mobile which operates in Australia, UK, US and Canada. This uses contracts to other network providers also like in UK the Virgin Mobile uses T-Mobile network. Sprint network is used in US and the Optus network in Australia. In Canada the carrier of Virgin Mobile is Bell Mobility network.
The first commercially successful MVNO in the UK was Virgin Mobile UK, launched in the United Kingdom in 1999 and now has over 4 million customers in the UK. Its success was replicated in the US, but ventures in Australia have not been so successful, and failed in Singapore, albeit with a different strategy.
The first MVNO using the full definition was created by Tele2 in Denmark, and subsequently rolled out in several European markets. This model formed the basis between the co-operation between Tele2 in Sweden and Telia, created when Telia failed to obtain a 3G license in their home market
MVNOs generally does not have their own infrastructure and in many cases these use their own Mobile Switching Centers (MSC) and Service Control Points (SCP).Many MVNO companies use their own mobile Intelligent Network (IN) for offering value added services. The MVNOs have total control over SIM card, billing, and customer, marketing and branding services. Many times when they support Operational Support Systems (OSS) and Business Support Systems (BSS) the mobile operator must also maintain their own OSS/BSS processes. These procedures are distinguished from those of MVNO companies.
The MVNO offers many benefits to large cellular services. They customize their products for their customers and for offering to all sections of the market. A network might not be utilized in all areas in the right manner. Mostly it is underutilized in areas where the technology grows very fast to meet the demands of the transfer of data and information. The MVNO also can focus on the area of new growth thus assisting to make the network more popular with the market area that enjoys being ahead of the crowd. This also helps generating more profits and in total this helps in growing the funds. With the value-adds these MVNOs provide billing as well as customer care operations.
Hence, the MVNO owns their customers in this sense. Generally the end user receives voice as well as data services through this paid agreement. One must enter into a Partnership to become a MVNO. This partnership must contain a regular telco, a sales idea and a strong customer database. MVNO models also help in lowering the operational costs for mobile operators (billing, sales, customer service, and marketing), so in turn helps operator to fight churn, grow average revenue per user by providing new applications and tariff plans.
According to MVNOdirectory.com as of February 2009, there are over 400 active MVNOs operated by over 360 companies. Close to 100 companies are planning to operate within the sector and there are 72 brands run by MNOs pretending to be MVNOs.