The Rise of the MVNE

Jim Machi : Industry Insight
Jim Machi

The Rise of the MVNE


The Mobile Virtual Network Operator (MVNO) business model is changing rapidly.  No longer are MVNO’s just reselling a Mobile Network Operator (MNO) services under a different brand to cater to specific target markets, such as prepaid calling or senior citizen servies. 

MVNO’s today are also looking to expand the services they offer. There are even industry summit’s these days that cater to MVNOs because of all the differentiation that is possible.  Why all this potential differentiation?  Well for one they want to truly differentiate from the MNO network they are utilizing so that they get better customer loyalty.  Also, since an MVNO would specialize in marketing (compared to the MNO) and might see a potentially hot service to offer to capitalize on a trend, then there is money for the taking if the MNVO could roll out that new cool service.  But with a new service that requires an upgraded MNO network, the MNVO is dead in the water unless the MNO upgrades.   This means that MVNOs are utilizing infrastructure equipment that is tied into the MNO network, either purchasing the equipment themselves or through MVNEs (Mobile Virtual Network Enablers).  

What are examples of the above services?  For a repackaging of an MNOs services scenario, we’re probably familiar with prepaid plans offered by alternative carriers.  These simply package up the billing differently to cater to the target audience.  For instance, there might be an audience for prepaid calling for “emergiencies” for those who typically might not carry a cell phone (Can you imagine that, but yes, there are folks who might not use a cell phone as if it’s a born body part!) but want to have one with them “just in case”.  In this case, a standard type of monthly contract is not worth it and they’re happy to pay by the minute in case they need to use it. Or along this same thinking, really offer a specialized senior citizen service, a medical alert device and cell phone all in one, such as offered by the MNVO Greatcall.  Here the MVNO would have their own Billing systems.

Another example might be an MVNO who specializes in advertising to lessen the per minute costs.  Maybe you are OK to get ads sent to your phone since you want to lower  your monthly costs.  In this case, understanding subscriber behavior and insertion of location based advertising to the subscriber would be welcome.  But what about a truly new kind of service? 

What if the MVNO wanted to offer a service that automatically switched the calling to WiFi? For instance, this Virgin Mobile app detects WiFi connections and if it’s free to call.  Kind of cool.

But what about seamless switching of a cellular call to a WiFi network.  There would need to be some kind of roaming service to and from the MNO network.  In both of these example, some kind of new kind of infrastructure equipment that interacts with the MNO network would be required.  Now the MVNO is getting into service nodes and relationships with ISPs

This means more complexity, and this has given rise to MVNE’s who specialize in offering the MVNO a fast and efficient way to offer new services.  Teleena is an example highlighted  in the link.  MNVE’s would offer their services to multiple MNVO’s thereby spreading infrastructure costs around.  While the MVNO would pay the MVNE some margin, the MVNO benefits by not having to buy and manage the equipment themselves.  An outsouce model if you will.


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