A mobile virtual network operator, or mobile other licensed operator is a wireless communications
services provider that does not own the wireless network infrastructure over which the MVNO
provides services to its customers.
An MVNO enters into a business agreement with a mobile network operator to obtain bulk access
to network services at wholesale rates, then sets retail prices independently.
An MVNO may use its own customer service, billing support systems, marketing and sales
personnel or it may employ the services of a mobile virtual network enabler.
Background and history The emergence of the MVNO model in various
markets worldwide varied based on local factors.
In some markets, the MVNO concept came about as the result of regulatory intervention.
Regulators wished to force established mobile network operators to offer wholesale access
to their network to ensure robust competition to benefit the consumer.
In other markets, mobile network operators responded to market opportunities to offer
their excess capacity at wholesale rates to other entities in an effort to bring in incremental
revenue on what would otherwise be unused network capacity.
Mobile network operators believed that savings from not providing customer service and marketing
would offset any revenue lost by selling network access at wholesale rates.
For some of the earlier markets that embraced the MVNO model, such as in Scandinavia, the
regulatory authorities sought to introduce the MVNO model to drive competition into a
market that was considered to involve significant market power which existed for early entrant
mobile network operators in those countries.
Regulators believed that the MVNO model would be a time efficient and cost-effective route
for telecoms companies to enter the market and therefore bring increased competition
for the benefit of the consumer.
The MVNOs in Scandinavia ended up having a market share above 10%.
The efficiency is obtained by the nature of the MVNO business model.
An MVNO incurs no significant capital expenditure on spectrum and infrastructure and does not
have the time-consuming task of building out extensive radio infrastructure.
Certain mobile network operators believe that there is merit in operating a wholesale MVNO
business unit to complement their retail model and have therefore either openly embraced
potential MVNO partner or endeavored to launch their own branded MVNO.
The first commercially successful MVNO in the United Kingdom was Virgin Mobile UK, which
was launched in 1999.
The success of Virgin Mobile UK was replicated by the United States licensee of the Virgin
Mobile brand.
Initially an independent company, Virgin Mobile USA was eventually acquired by its host mobile
network operator, Sprint Nextel, for approximately US$483 million.
The first MVNO was created by Tele2 in Denmark, and subsequently rolled out in several European
markets.
This model formed the basis between the cooperation between Tele2 in Sweden and Telia, created
when Telia failed to obtain a 3G license in their home market.
MVNOs worldwide As of October 2012 there were 634 active MVNO
operations worldwide, which in turn are operated by 503 companies.
The largest multi-country MVNO is Lycamobile, which operates in 17 countries.
PLINTRON world's largest multi-country MVNE have enabled Lycamobile and by 2016 will be
offering its MVNE services in 31 countries.
MVNOs target both the consumer and enterprise markets.
The majority of MVNOs are consumer-focused and most have a focus on price as their unique
selling point; customers of major carriers spend about 3.4 times as much money on their
service as MVNO customers.
In addition to traditional cellular voice and messaging services, 120 MVNOs now also
offer mobile broadband services.
Light MVNO Known also as reseller, White Label, or service
provider model.
The MVNO owns only marketing, and sometimes billing and provisioning.
The MNO owns the MVNO SIM card.
Legislation Presently many companies and regulatory bodies
are strongly in favour of MVNOs.
For example, in 2003, the European Commission issued a recommendation to national telecom
regulators to examine the competitiveness of the market for wholesale access and call
origination on public mobile telephone networks.
The study resulted in new legislation from NRAs in countries like Ireland and France
forcing operators to open up their network to MVNOs.
In the Middle East, Jordan's TRC has issued its first MVNO regulations in 2008 facilitating
the entrance of the first MVNO in the region.
In Brazil, the MVNO was regulated by Anatel, the Brazilian Agency of Telecommunications,
in November 2010.
See also Competitive local exchange carrier
List of Europe MNOs List of United States MVNOs
VNO References
^ {{The Virtual Network Operator in Sweden}}