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Abstract
The mobile virtual network operator (MVNO) business model is currently a widely discussed topic in the
industry. For many companies it is the ideal model for a sustainable and profitable extension to their
business.
Even for small and medium sized companies, the introduction of a MVNO business model is a good
opportunity to position themselves in the mobile telecommunication market with a target-group specific
offer.
This paper briefly explains the MVNO and MVNE business models and outlines proposed solutions.
The basic challenges are associated with the integration of business processes and systems. Due to our
unique approach and deep industry and technology know-how, Valtech is the optimal consultancy and
implementation partner for this task.
Contact
Valtech GmbH
Am Wehrhahn 39
D-40211 Duesseldorf
Tel: 0211 - 179 237-0
Fax: 0211 - 179 237-19
E-mail: telco@valtech.de
Web: www.valtech.de
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There are 4 categories of business model that are referred to as MVNO models:
1.1.1 Reseller
In the reseller model the MVNO resells mobile services, typically prepaid contracts. The customer rela-
tionship, however, is usually maintained by the MNO, which means that the MVNO hands the customers
over to the MNO.
As the customer relationship is established between the MNO and the end customer, the reseller is not
an MVNO in the actual sense.
1.1.4 Full-MVNO
The full MVNO only uses the MNO’s radio network. The MVNO provider operates its own core network
and offers its customers a product and services range that is completely independent from the MNO.
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It can be quite attractive to MVNOs to outsource parts of the business process to an MVNE, as no spe-
cific know-how has to be built up and there is a lower commercial risk in comparison to the MVNO realis-
ing its own business process operation.
In principle, this advantage has to be balanced against additional integration complexity and a potentially
limited agility of the MVNO.
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Apart from choosing the business model, the basic challenges are the integration of the new business
processes and systems with the MVNO’s existing process and system landscape, and the management
of costs and risks.
It is also imperative to choose a course of action that allows step-by-step entry to the market and valida-
tion of basic assumptions regarding the business success and the impact on the existing business seg-
ment at a very early stage.
Additionally, the first commercial start should be made as soon as possible in order to receive early
feedback. Systematic feedback cycles make it possible to include the commercial and technical experi-
ences when realising the next step. Thus, costs and success risks are controllable at any time.
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The basic challenge is that the MVNO is usually unfamiliar with these business processes and the im-
pact of integration with existing business processes is difficult to evaluate.
Thus, industry-spanning process know-how on telecommunications and on the core industry of the
MVNO is mandatory.
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Valtech focuses on an incremental procedure to minimise commercial risks. First of all, the existing con-
tent of third-party suppliers will be integrated and, if necessary, adjusted. In a second step, own content
and services are incrementally realised and integrated.
The existing content of third party suppliers is usually integrated with the help of established standard
products by Valtech’s technology partners, e.g. Sevenval FIT.
The choice of standard products guarantees the integration of content and, in particular, the support of
various out-of-the-box handsets.
Even new handsets can be supported immediately.
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BSS Business Support Systems: All systems mapping commercial business proc-
esses with telecommunication providers.
CDR Call Detail Record: Data record mapping telecommunication service usage.
Core Network Fixed network for the communication between radio network elements. In a
core network, both signalling data and user data (e.g. telephony, data ser-
vices), is transferred.
ESP-MVNO Enhanced Service Provider MVNO: MVNO offering its customers value-added
services based on the MNO’s telecommunication services.
Full-MVNO Full MVNO: MVNO only using the radio network of the MNO. The MVNO op-
erates all other network elements (e.g. switches, HLR) and the core network
on its own. To date, there is no full MVNO on the market.
NDC Network Destination Code: Prefix to the telephone number indicating the net-
work used (however, since the introduction of portable telephone numbers, a
unique allocation no longer exists).
MVNE Mobile Virtual Network Enabler: Company that carries out certain business
processes for the MVNO (e.g. accounting).
OSS Operation Support Systems: All systems mapping the technical functions of
the telecommunication provider.
POS Point of Sale: Shops selling products and services of the telecommunication
provider.
Provisioning (Business) process responsible for the setup of a new subscriber in the
MNO’s and MVNO’s OSS systems.
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SIM Subscriber Identification Module: Physical module (smart card) that identifies
and authorises subscribers of a mobile network.
SP-MNVO Service Provider MVNO: MVNO offering its customers the MNO’s telecom-
munication services as its own.
(Agile) UP Method for the realisation of projects with dynamic requirements. The Unified
Process (UP) provides for iterative project implementation. In each phase a
complete and expedient subset of the total functionality is realised. The
knowledge gained flows into the next phase. As a consequence, the customer
or user of the system is involved in the project at a very early stage.
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