Mobile Virtual Network: The Business, Gains & Industry Impact

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.

The quest for MVNO services in Nigeria was initiated by the Nigerian Communications Commission (NCC) when it had a consultative forum with stakeholders in the telecoms industry that led to the release of a consultative paper in line with the 2007 consultative guidelines of the Commission.

The Commission obtained comments from industry stakeholders and the general public on key considerations, and the comment were used to formulate a sustainable and efficient MVNO licensing framework, as well as a highly conducive regulatory regime that was expected to facilitate growth and development of the telecoms space, through competitive and differentiated services offered by success applicant to operate virtual operators.

By December 2020, the NCC had completed the consultative process for to finalize its decisions about MVNO introduction in the nation’s telecoms market.

The final take-off of the MVNO services in the country was in the newsbreak of yesterday reported by TechnologyMirror when the NCC called for application for MVNO license from the industry players stipulating the process of acquiring the license.

Across the global and in the developed economies of the world, MVNOs are vital aspect of the telecoms space due to key roles that they play.

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.

According to experts and like as stated by the NCC, the MVNOs are typically brands with access to a large existing base of consumers, 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 for the consumers.

The NCC in its statement introducing the MVNO license had stated that the MVNO is part of its drive to create an enabling environment.

How Relevant…
What makes the MVNOs unique is that they don’t invest in mobile network infrastructure but must provide other important services that support their clients.

There are services that help MVNOs transfer value and positive brand experiences such as marketing and promoting products, managing billing and invoicing of clients for services and subscriber registration to the network.
Beyond that they are also going to offer subscriber services like balance checks, network top-ups, customer care, and SMS capabilities, and then in some cases distribution of assets like SIM cards and mobile phones.

What a Great Asset to Mobile Network Operators…

The MVNO are going to be adding a value to the services of the traditional mobile network operators by helping cushion competition as stated by the NCC.

For instance, the mobile operators may choose to leverage MVNOs for two main reasons.

The presence of MVNO will help the MNO 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 but with the MNVOs this becomes a additional support.

So the solution is to find partners with large customer bases. These partners can position themselves and leverage brand affinity to sell more mobile network services to their customers.

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.

Available MVNOs…

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 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.

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-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, 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.

And the business…
TechnologyMirror sets up a new business arm, calls it TechMirror Telecoms, gets a MVNO license from NCC and goes to MTN to buy three million hours of call, 1000GB of data, two million SMS and MTN gives us 60% discount for that bulk purchase.

And then we resell to the end users. The differentiate via customer service, pricing innovation, even though the core infrastructure and networks are powered by MTN.

Having opened this fresh window of business for the MNOs, there is no doubt that the NCC is rejigging the industry for more vibrant performance.

Additional reports from AVSystem & Tekedia

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