5/10/22, 10:41 AM What is a Mobile Virtual Network Operator (MVNO)?

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posted: September 01, 2021 

What is a mobile virtual network operator (MVNO)?

Internet of Things (IoT) IoT device management IoT platform

Mobile virtual network operators or MVNOs play a unique part in today's economy.
In this article, we'll examine how exactly their business model looks and what they
can bring to the "IoT table".

What is a mobile virtual network operator or MVNO?

A mobile virtual network operator or MVNO is a wireless communications service
provider. Unlike traditional mobile network operators (MNOs), MVNOs do not own
the infrastructure they use. Instead, they lease it from MNOs and use the
infrastructure to deliver a unique set of services to their markets. MVNOs acquire
bulk access to an MNO’s services at discounted or wholesale rates and set retail
prices for sale to consumers.

Tesco Mobile is an MVNO. It offers cell phones, call plans, and data as an MVNO.
Tesco Mobile is able to be an MVNO by leveraging O2’s mobile network
infrastructure.

What makes a mobile virtual networks operator unique?

There are four types of MVNOs that are distinguishable by the models they use.
However, MVNOs share a similar set of characteristics that make them unique.
MVNOs are typically brands with:

Access to a large existing base of consumers

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Loyal customers, making it easier to sell white-labeled mobile networks products

and services
Capital or access to capital to invest in front-end systems to cater to consumers
(think marketing, sales, and customer services)

As a large multinational supermarket chain, Tesco has access to a large market of

consumers. Using its name and reach, Tesco is able to leverage brand affinity to
offer consumers an alternative to traditional mobile network deals.

And this is not the first time Tesco ventured into a new industry. They have done
something similar in the financial sector, creating a bank in partnership with the
Royal Bank of Scotland -- proof that brands wield a tremendous amount of power.

What does an MVNO do?

MVNOs don’t invest in mobile network infrastructure but must provide other
important services that support their clients. These are services that help MVNOs
transfer value and positive brand experiences:

Marketing and promoting products

Managing billing and invoicing of clients for services
Subscriber registration to the network
Offering subscriber services like balance checks, network top-ups, customer
care, and SMS capabilities
Distribution of assets like SIM cards and mobile phones

Why do mobile network operators need MVNO?

Mobile operators choose to leverage MVNOs for two main reasons. These are:

An opportunity to reach non-targeted segments

Mobile operators are like most brands; they are always looking to grow, but growth
can sometimes be hard to achieve. A solution is to find partners with large

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customer bases. These partners are able to position themselves and leverage brand
affinity to sell more mobile network services to their customers.

Leverage infrastructure to create additional revenue streams

Mobile network infrastructure is also often capable of managing more user

requests than it has at any given time. And for mobile operators, this presents the
opportunity to offer unused bandwidth to MVNOs, making it possible to sell access
to infrastructure and generate revenue.

What kind of MVNOs are there?

MVNOs exist in four forms. Here’s a look at each along with examples in various
countries:

Branded reseller

Branded resellers are considered the “lightest” and quickest of MVNO business
models to create. This is due to the way this type of MVNO functions. Brand
Resellers leverage their brand name and, from time to time, their distribution
channels to acquire new or onboard their existing customers.

Branded resellers often also invest less to become MVNOs, which influences their
control over various aspects of their new business. Low investments mean less
impact on the types of products they can create and offer to the market, and
potentially also the revenue they can generate.

Rain is a South African-based MVNO that offers data-only deals. Rain provides
customer support to its customers and handles the promotion and sales of their
SIM cards through retail outlet partners and via their website.

Full MVNO

Full MVNO is considered the most entrenched type of MVNO. Full-MVNOs typically
have greater access to the mobile network operator’s infrastructure. Full-MVNOs are
responsible for all other elements in the value chain, resulting in greater investment
on their part.

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Vialis is a fixed and mobile operator in Alsace (Eastern France). Originally founded
in 2003 as a gas and electricity provider, the firm branched out to offer telco
services in 2006.

Light MVNO

Light-MVNOs fall into the gap between Branded Resellers and Full-MVNOs. They
handle sales and marketing, back-office processes, and value-added service and
operations.

Ello Mobile, a Netherlands-based light MVNO, was founded in 2006. It offers local
and international calling plans and mobile data deals.

Network enablers

Network Enablers, otherwise known as “Mobile Virtual Network Enablers” or

“MVNEs”, can be considered middlemen. They provision infrastructure for MVNO
operations. MVNEs can also provide value-added services and/or back-office
processes to other MVNOs.

In many ways, MVNEs are true to their names. As enablers, they provide a space for
MVNO to enter markets. They also serve as aggregators, taking the requests of a
group of small MVNOs and negotiating better terms with MNOs. These solutions
make it possible for “in-a-box” MVNO models to be offered to smaller MVNOs,
accelerating market access for more brands.

Pareteum is a global provider of Communications Platform-as-a-Service solutions. It

enables interested brands the opportunity to become light MVNOs.

What do MVNOs need to be competitive?

To deliver superior services to their customers, MVNOs need a secure, flexible, and
robust IoT platform. Here are the most important aspects that MVNOs should
consider when choosing the right platform:

Robust device security

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IoT, as a technology, is especially vulnerable. Mobile devices are often not updated
with the latest firmware, making them easily susceptible to malware and other
malicious threats. And when introduced to a network, these susceptible devices
increase the threat matrix for already busy administrators.

To do away with security threats, MVNOs must invest in platforms that offer flexible
mechanisms for FOTA and SOTA upgrades to always keep their customer’s devices
up to date.

Strong reporting capabilities

Prevention will always be better than the cure. For MVNOs, preventing device critical
failure is only possible with access to information on customers and their devices,
and a platform capable of identifying and managing anomalies.

Fast time to market of their services

An intuitive graphical user interface, device auto-discovery, no-code environment –

these are features that streamline service deployments for MVNOs, making it easier
to serve existing and new customers.

Summary
MVNOs bring tremendous value to their markets. They provide mobile network
operators with access to more customers, spurring growth. And for consumers,
MVNOs deliver more competitive products and services. Forward-thinking MVNOs
can also increase their competitive advantage by investing in the right IoT platform.
Control of their device network with platforms such as Coiote IoT Device
Management can enable them to improve operational efficiency, making it possible
to scale with ease.

AVSystem

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