More often than not, MVNOs have not been particularly successful. We have seen many MVNOs on the market, but most have failed commercially and have sold their customer base to the host-MNO.
So what does it take to be a winner in the MVNO space? Well, let us start by taking some perspective on where MVNOs come from.
What are MVNOs all about?
MVNO are mobile service providers that do not own a GSM or UMTS spectrum licence but partner with an existing mobile network operator, also called host-MNO, and buy capacity on their radio access network. Since their initial appearance in the late 1990s in the Nordic countries and the UK, MVNOs have became widespread in Europe, America and some countries in Asia. They are now emerging in developing countries in the Middle East and Latin America.
MVNOs exist in various forms depending on the depth of their role in the value chain:
- Full-blown MVNOs own the same network assets as an MNO except a radio network. They also have their own Mobile Network Code and own interconnection agreements. This type of MVNO is the exception rather than the rule because MNOs usually consider them to be ‘too big a threat’.
- MVNO-light own basic service platforms (SMSC, VMSC) as well as Billing and CRM systems. Other network assets are provided by the host-MNO (MSC, HLR, Mobile Network Code, Interconnection).
- Branded Resellers resells the products and services of a host-MNO under their own brand and are essentially a marketing and sales channel. They are the most common form of MVNO on the market because they are easy to set-up and regarded as the lowest threat by MNOs.