Mobile Virtual Network Operator

Mobile Virtual Network
Operator
Presented by:
Syndicate 4
Unmesh Chitnis 08020541012
Disha Seth 08020541015
Mohit Malik 08020541028
Samruddhi Dadhe 08020541046
Vaibhav Misra 08020541053
© 2009 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights
reserved.
MVNO Dynamics
MVNO:
It is a mobile operator that does not have any spectrum or other telecom infrastructure. It
purchases airtime from existing player and resells them to customers.
MVNO Ecosystem
HNO
HNO: Owns spectrum &telecom infrastructure
MVNC
MVNE: Provide services like Billing, Provisioning.
MVNE &
MVNC & SI: Trusted advisor to MVNO SI
•Strategy and Planning MVNO
•Business Case and Operational Models

•System Integration and end-to-end testing
reserved.
MVNO models
reserved.
1) Reseller
 A reseller offers products and services of its operator partner (HNO)
 The model suits businesses that have an existing brand and retail infrastructure in place
 Main focus is on branding, distribution, and sales.
 Model is simple to implement and market entry is easy
2) Service Operator
 Offer innovative pricing and its own service packages
 Objective is to differentiate its services
 Takes care of billing, and CRM
 Unlike resellers, they can compete with HNO in price
3) Full MVNO
 A full MVNO has full control of its service offerings
 Maintains its own core network
 Effectively operates as a HNO but without its own radio network
 Has its own SIM cards, IMSI codes, numbering systems, interconnection rights, and
responsibilities 4
reserved.
Key environmental Factors
 HNO’s are open to MVNOs
 Competitive market
 Low penetration and Under served segments
 Friendly Regulatory regime
 Number Portability
Critical success factors

 Know the customer
 Strong brand
 Up sell, cross sell, bundle
reserved.
Global Trend Analysis
Regulatory
Regulatory Position Examples Relevant Regulations Number of MVNOs
Force MNOs to share 1) Hong Kong Example network: Hong Kong 1) Hong Kong: 7
network 2) Norway 2)40% network capactiy 2) Norway: 8
dedicated to MVNOs
3)No limit to number of MVNO
licences
4)Uniform wholesale pricing
regardless of MVNO
Facilitate launch of 1) Australia Example Market: Australia 1) Australia : 20

MVNOs 2) Belgium 2)Mandatory sharing of 2) Belgium : 15
3) France networks enforced on 3) France : 17
4) Denmark operators with significant 4) Denmark : 11
5) UK market share 5) UK : 18
3)Wholesale pricing on a cost
plus basis with regulated
margins
6
reserved.
Regulatory
Regulatory Position Examples Relevant Regulations Number of MVNOs
Indifferent to MVNOs 1) Austria Example Market: Japan 1) Austria : 4

2) Canada 2)No requirement on MNOs 2) Canada : 5
3) Japan to open networks to MVNOs 3) Japan : 2
4) Portugal 3)MNOs allowed to price 4) Portugal : 2
discriminate based on its
own business objectives
Discourage development of 1) Bolivia Example Market: Argentina 1) Bolivia : 1

MVNOs 2) Argentina 2) Large number of MNO 2) Argentina : 0
licenses granted to
make market
unattractive for MVNOs
3) Stringent roll out
obligations to MNOs
make MVNO entry
difficult
Prohibit MVNO 1) Greece Example Market : Italy 1) Greece : 0
2) Italy 2) MNO not allowed to 2) Italy : 0
host MVNO till 2011 as
part of 3G license
agreements
7
reserved.
Worldwide Market
• Total MVNO market – 3% of Total Mobile Market
• Currently, over 400 active MVNOs operated by over 360 companies
• Western Europe – 40% of the worldwide MVNOs, Netherlands and Belgium

represents the highest share
• Hong Kong - highest MVNO penetrated Asian market with 7,20,000 customers,
i.e. around 7.5% market penetration
• Govt. of India recently accepted TRAI's proposal for the entry of MVNOs in the
domestic market
8
reserved.
Various Models
• DISCOUNT MVNOs – provide cut-price call rates to the market segments. These
include Virgin Mobile and Easy Mobile
• LIFESTYLE MVNOs – focus on specific niche market demographics. Like, Boost

Mobile in US and ID&T Mobile in Europe
• ADVERTISING-FUNDED MVNOs - like Blyk or MOSH Mobile build revenues from

advertising to give a set amount of free voice, text and content to their
subscribers.
• ETHNIC MVNOs - like Lebara target ethnic communities by providing

inexpensive calls to their home country.
9
reserved.
Impact of MVNO
The impact may be categorized under the following parameters:
• Penetration of mobile communication in emerging markets

• Changes in policy regulations
• Increase in Usage
• Increase in competition giving rise to innovation
• MVNO in 3G
• Data only MVNOs
10
reserved.
MVNO in India
• VIRGIN – TTSL “Think Hatke”

• On 6th Aug 2008, TRAI released recommendation on introduction of MVNO in Indian
Telecom Market
• Key recommendations
4.MVNO free to choose its business model
5.No limit on number of MVNOs attached to an MNO
6.MNO to pay the spectrum charges for utilisation of spectrum by MVNO
7.Entry fees for MVNOs – 10% of MNOs subject to a maximum of Rs. 5 crore for Metro/
Category A, Rs. 3 crore for Category B and Rs. 1 crore for Category C service areas
8.Annual license fees same as that of MNO of the service area
9.No Roll out Obligations for MVNO
10.FDI limit 74% (same as MNO)
11
reserved.
MVNO in India
• Challenges
2. MNP implementation
3. Reducing Tariffs, Shrinking ARPU and low profit margins
4. Price sensitive customer
5. Financial Viability
6. Policies
12
reserved.
Architecture : Today
reserved.
Architecture : Tomorrow
reserved.
What’s Different from MNO?
reserved.
What’s Different from MNO?
reserved.
How to go about ?
Responsibility
Accountability
Consultation
Information
reserved.
MVNO-MVNE Contours:
reserved.
Enterprise IT « in real life »
• Many systems
• Many data
sources
• Many different
data models
• Different
references
• Duplicates
Problems in
data
consolidatio
n
19
reserved.
Topsy-Turvydom :Who’s the savior?
MVNE!!!!
reserved.
A Real case to address:-
What ?
Why?
How?
reserved.
Service portfolio & Operations capabilities
Customer Provisioning Customer
Acquisition & (activations, Billing Care SIM cards Value added services
Order Entry portability) & CRM
SIM applets
Revenue Assurance
Payment Collection
Customisation &
Prepaid reload
management
branding, call mngt,
Post-perso security
process for
Order-entry
CRM system small batches Switch & Service
tool
node
Prov. & web enabled for UMS, follow-me, call
web enabled for call-centre & self termination, SMS-
end-users, workflow GW
care
distributors
MNO, service WISP
platforms, billing
balance management
APN for user

Post-paid, invoicing,
system
Prepaid engine SIM profile authentication &
definition for mobile portal mngt +
IN based
large batches WAP gtway + MMS +

remote handset
configuration
SIM mngt &
Logistics Call centre OTA server
(3rd party) (3rd party) HLR / GMSC
(roadmap)
Marketing / Business / Regulatory support

(offer definition, economic modelling, business processes, regulatory requirements)
22
reserved.
Vision of a possible efficient market structure
Mass market MVNOs Segmented / niche MVNOs
Media Distributor Fixed telco Ethnic Sports SME Switchless resellers M2M
MVNO MVNO
niche niche
MVNO MVNO MVNO MVNO
mass market mass market niche
MVNO niche
MVNO
niche niche
MVNO MVNO
MVNE MVNE nicheMVNO nicheMVNO
niche niche
MVNA ( Aggregator)
MVNE
MNO
23
reserved.
EasyBorder : Transatel offer for frequent travellers & cross- border population (FR, BE, NL, LU)
www.transatel.com
• Dedicated offer for high roamers
– 30% to 100% price reduction on roaming
– Better continuity & dedicated services
• Commercialised in FR, BE, NL, LUX
• Niche marketing
– Direct marketing
– Flyers & billboards in int’l train stations
– Advertising in targeted newspapers & websites
– Active referral program
– Partnership with frequent traveller programs
• Sales: telesales & web
24
reserved.
Transatel international reach
Roam Triple Wireless
25
reserved.
IT systems to support CRM & billing
Customer Management
Other P/F &

IN P/F
systems
Subscribers Resources
CRM Service P/F
& (SIM &
Customer service
(sales & mkt)
Provisioning
Order-entry /
Catalogue MSISDN) 3rd parties, etc.
API
Account
Web
interface
Status
MNO
Trouble
Front End &
ticketing
(O/E & C/S) Network IT interface
features
GSM
WWW network
Customers Prepaid top- IN call-
Distributors IVR
up mngmt control INAP / CAMEL
MVNO back-office
SMS
Real-time
rating
PDF email
Post-paid
CDR
WWW mngmt &
mediation CDR files from 3rd parties
invoicing
print-shop
Reporting &
Billing
Bank interface
data w/h
26

reserved.
How the Problems arise?
Reporting needs are …
• Repetitive
– Finances and marketing will share lots of requirements, but expressed
differently
• Subtly different
– Finances would like a report starting on Jan, 1st.
– Marketing would like the same report, starting on Dec, 10th (Christmas
offer…)
• Complex
– Marketing would like to know the revenues generated by an offer (billing
data), but with differentiation of the different acquisition channels (CRM
data)
• Expressed by business users
– Business vocabulary : they won’t use the name of table and columns !
– They don’t care about the naming conventions in data-models
– They don’t care about technical constraints
27
reserved.
First approach
• Custom SQL queries

• Queries against the different databases of the different applications
• Use Excel sheets (with embedded queries) to federate data, and produce charts
• Use existing applications to deduce stats (from displayed grids in a search screen
for instance…)
28
reserved.
Enterprise IT « in real life »
29
reserved.
Complexity
• Queries are complex
– Samples :
• mvno_activation_monitoring.sql
• mvno_dump_accounts.sql
• mvno_financial_report.sql
• process_monitoring.sql
• This kind of queries :

– Use many tables, sometimes from several databases, sometimes from
several systems
– Needs many indexes
– Produce large result sets
– Are long to execute
30
reserved.
Volumes
• 1 MVNO = 10,000 to 100,000 subscribers

• Around 200 CDRs (call data records) per subscriber per month
(Up to 800 CDRs per month for some specific offers with a lot of data traffic)
• 100,000 subs * 200 CDRs * 12 months = 240 M CDRs / year
• 800 bytes of storage per CDR (including indexes) =~ 190 GB of storage per
MVNO per year
•  doing a SELECT query over the whole data of the year (for instance,
sum of all traffic) would require a lot of time of execution, and a lot of
resources (disk, CPU) on production server
• 1 MVNO = 5 tariff-plans = 10,000 rates implemented in billing
• Call destination analysis tables (numbering plans) = 600,000 destinations

in the world
31
reserved.
No reactivity to change
• One report = one query  catastrophic !!
• Each set of reports evolution needs a project organization :

– specification by business,
– technical specification (complexity to interpret business requirements)
– testing,
– move to production
• Even for minor changes !!
32
reserved.
OLTP models are not adapted
• OLTP- Online transaction processing is the common modeling for business

applications
– transaction-oriented
– data is highly normalized (cf. 3 normal forms)
• OLTP models are not designed for large queries
– Performance impact, database locking
• OLTP models are not designed to maintain history
– Often, OLTP systems store a snapshot of reality. For instance, they store the current
status of some entity, but not all the history of statuses for that entity and the dates
of each change.
– Keeping all activity for a long time in OLTP systems would have an important impact :
• Difficult to administrate indexes
• Performance impact
• Time to backup & restore database (because systems fail one day or another)
• OLTP models are not adapted to reporting
– Data normalization decompose data into many tables and joins, resulting in complex
queries
33
reserved.
The result :
• 90% of time spent in developing and producing the reports, 10% spent to
analyze them
• Use of user-interfaces not designed for reporting
• Too few people know how to produce the key reports
• Performance impact on production systems
• Reports are incomplete, no sufficient history
• “I have data everywhere, and sometimes I forgot some data-source in my

reports”
• “I get data from many different systems to fill-in my Excel sheet”
• “I’m not totally confident in my reports”
• “I make a lot of hypotheses in my simulation, but I cannot verify them”
34
reserved.
All these problems = the field of BI
• Difficulties in data acquisition

– Need dedicated tools to collect data from different systems, with cleaning
and consolidation capabilities
• Difficulties in data storage with OLTP on production systems
– Need different data-models to store history
– Need different databases to store history
– Need different engine to do the analysis and calculations
• Difficulties in data restitution with SQL
– Need tools usable by business users
• BI = Business Intelligence = Field of technologies that facilitate acquisition,

analysis and restitution of data to help in taking decisions
35
reserved.
Project organization
36
reserved.
What users want
37
reserved.
What they specify
• “Put all information you have, we will select things afterwards”
38
reserved.
What you’ll manage to do
39
reserved.
Then How to run Square
wheeled Car?
reserved.
Select requirements and organize phases
• Talk with business users, again, again and again !

• Organize requirements in a matrix of choice :
P2
complexity
P1
P3
business priority
• Eliminate complex and non-urgent needs, and organize project phases
41
reserved.
Define granularity of data
A radar diagram can help
Called region
you to :
Zone
Called number
• Identify the needed
Call type dimensions and their
type
SMS, Voice,
GPRS
Country hierarchies
No detail
Full detail City Full detail

• Decide the level of
granularity you need to
Offer Operator keep in your datamarts
Country
Offer group
Zone
Seconds Roaming
Offer group network
Customer Minutes
Hour
MVNO 2005 data
Day 2006 data
Customer group Time of call
42
reserved.
Learnings from experience…
• Dimension design : beware of cardinality !
• Example : Time dimension
• First design : one table for all granularities, from year to second
• 365*24*3600 = up to 31’536’000 rows by year !!!
• This design was catastrophic on performance of everything : loading, pre-
processing, querying, custom calculations (advanced MDX)
 In fact, bad analysis of business need

– Day granularity was enough for most of time dimension usage (date of bill-
cycle, date of call, date of subscriber creation, etc.) = 365 rows per year
– Second granularity was useful in a unique case : time of call placement, only
86400 rows and rarely used.
 2 different time dimensions : a “Date” dimension (used a lot), and a “Time”
dimension (used once in the model)
 Result : Pre-processing time improved by a factor of 20…
43
reserved.
Some vendors of BI software…
• ETL
– Informatica
– IBM • OLAP
– SAS – Microsoft Analysis Services
– Cognos – Hyperion
– DataMirror – Oracle
– Microsoft SSIS – SAP BW (dedicated to SAP solutions)
– Sunopsis – SAS
– Business Objects • Reporting
– Oracle – Business Object / Crystal Report
– Open Source : Talend, Enhydra – Cognos
• Storage – Hummingbird
– Generalists : Oracle, Microsoft SQL Server – Hyperion Solutions
– Specialized : – Microsoft reporting services
• Red brick – Information Builders
• Teradata – Oracle
• Sybase IQ
– SAS
• SAS
• Netazza – Informatica
• Datallegro – MicroStrategy
– Open Source : MySQL – Actuate
– Open Source : JasperReports, Pentaho
44
reserved.
Thank You
45
reserved.

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Mobile Virtual Network

•Strategy and Planning MVNO

•Business Case and Operational Models

Critical success factors

Facilitate launch of 1) Australia Example Market: Australia 1) Australia : 20

Indifferent to MVNOs 1) Austria Example Market: Japan 1) Austria : 4

Discourage development of 1) Bolivia Example Market: Argentina 1) Bolivia : 1

• Currently, over 400 active MVNOs operated by over 360 companies

• Western Europe – 40% of the worldwide MVNOs, Netherlands and Belgium

• LIFESTYLE MVNOs – focus on specific niche market demographics. Like, Boost

• ADVERTISING-FUNDED MVNOs - like Blyk or MOSH Mobile build revenues from

• ETHNIC MVNOs - like Lebara target ethnic communities by providing

The impact may be categorized under the following parameters:

• Penetration of mobile communication in emerging markets

• VIRGIN – TTSL “Think Hatke”

APN for user

large batches WAP gtway + MMS +

Marketing / Business / Regulatory support

• Commercialised in FR, BE, NL, LUX

• Sales: telesales & web

Other P/F &

• Custom SQL queries

• This kind of queries :

• 1 MVNO = 10,000 to 100,000 subscribers

• 1 MVNO = 5 tariff-plans = 10,000 rates implemented in billing

• Call destination analysis tables (numbering plans) = 600,000 destinations

• One report = one query  catastrophic !!

• Each set of reports evolution needs a project organization :

• Even for minor changes !!

• OLTP- Online transaction processing is the common modeling for business

• “I have data everywhere, and sometimes I forgot some data-source in my

• Difficulties in data acquisition

• BI = Business Intelligence = Field of technologies that facilitate acquisition,

• Talk with business users, again, again and again !

• Eliminate complex and non-urgent needs, and organize project phases

Full detail City Full detail

Customer group Time of call

 In fact, bad analysis of business need

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