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mobile virtual network operator (MVNO)

What is a mobile virtual network operator?

A mobile virtual network operator (MVNO) is a reseller of wireless communications services.

An MVNO leases wireless capacity (in effect, purchases minutes) from a third-party mobile network operator (MNO) at wholesale prices and resells it to consumers at reduced retail prices under its own business brand.

MVNOs lease and resell capacity from MNOs in the form of minutes or data bandwidth. MVNOs operate under their own brand, and customers may not always be aware they are actually using a network owned by a different company. They purchase this capacity at wholesale prices and can afford to offer competitive or discounted retail prices due to their lower overhead costs.

MVNOs don't have to deal with the significant infrastructure and operational costs associated with running a wireless network, whether it's fourth-generation (4G) or fifth generation (5G). For example, they don't need to pay for radio frequency spectrum licenses and construct and maintain cell towers and other network hardware.

MVNOs have low overhead and can spend aggressively on marketing to increase their chances of selling minutes to consumers. MVNOs themselves, or via mobile virtual network enablers (MVNEs), manage sales, customer service, and sometimes marketing. MVNEs specialize in these areas.

MNOs such as Verizon Wireless and T-Mobile benefit from selling excess capacity to MVNOs; this generates additional revenue that would be lost otherwise. This can also help MNOs optimize use of their network resources. Rather than taking a loss, the MNO makes a small profit by offloading capacity in bulk at wholesale prices.

MVNOs commonly offer prepaid plans and might also provide postpaid plans. They aim to serve market segments or niches the major network operators do not serve adequately. This arrangement lets companies offer mobile services without the substantial investment required to build out a wireless network and gives consumers more options, potentially at lower prices.

What are mobile virtual network operator types?

We can categorize MVNOs based on the level of service and infrastructure they manage.

A chart showing the four types of MVNOs.
The four types of MVNOs: branded resellers, full MVNOs, light MVNOs and network enablers.

The main types of MVNOs include the following:

  • Full MVNOs have the highest level of control and infrastructure short of owning the physical radio networks. They have their own core network infrastructure and handle operations like billing, customer care, SIM card distribution, and marketing independently.
  • Light MVNOs have some or a light level of control over their infrastructure but rely more heavily on the host MNO for certain operational support. They might manage billing, customer care, and SIM card distribution but depend on the MNO's core and radio access networks.
  • Service provider MVNOs provide services under their brand but rely almost entirely on the infrastructure of the host MNO. They usually control billing, customer care, and sales, but the MNO handles core network operations and maintenance.
  • Branded reseller MVNOs have the least control over operations and infrastructure. They primarily focus on marketing, sales, and customer service initiatives under their brand name while the host MNO manages all technical operations, including network, billing, and SIM card distribution.
  • Efficiency MVNOs. focus on providing cost-efficient solutions for specific customer groups or niche markets. Although their operational model often varies, the primary focus is reducing costs and passing savings onto customers.

Each model offers a different balance of control, cost, and service differentiation. The MVNO chooses a model based on their market strategy, technical capabilities, and the agreement they can negotiate with the host MNO. As such, MVNOs present a unique value proposition in the telecommunications sector for both consumers and underlying MNOs.

What is the best MVNO type?

The best MVNO type depends on the specific market needs, the strategic goals of the MVNO, and the nature of the agreement with the MNO.

What is an MVNO-type GID?

Group identifiers (GIDs) refer to identifiers used within mobile networks to facilitate various operations. This includes determining the home network of a subscriber and managing connectivity. Stored on the SIM card, the GID is used to group subscribers or define service profiles. It can be used to apply specific network settings or permissions to a group of subscribers.

What is an MVNO-type SPN?

Service provider name (SPN) is a text string that identifies the service provider. Stored in the SIM card, it can be displayed on the user's mobile device to indicate which network they are connected to. For example, in an MVNO scenario, the SPN would typically represent the MVNO's brand, even though an MNO provides the underlying network infrastructure.

What is an MVNO-type IMSI?

International mobile subscriber identity (IMSI) is a unique identifier, stored in the SIM card, for a mobile subscriber. The mobile network uses it to identify subscribers and manage connectivity. An IMSI consists of a country code, mobile network code, and mobile subscriber identification number. The MNC portion of the IMSI can be assigned to the MVNO, allowing the network to identify subscribers and route calls and data accordingly.

Becoming an MVNO

Becoming an MVNO is challenging, but with the right approach, it can be a profitable venture. To better your chances of launching a successful MVNO business, you should start with the following:

  • Conduct extensive market research to gauge demand and competition.
  • Craft a thorough business plan.
  • Familiarize yourself with regulatory requirements and obtain the necessary licenses.
  • Negotiate a wholesale agreement with an MNO for network access.

Establishing a strong brand identity through effective marketing, developing compelling service offerings, and establishing robust customer support is critical for market penetration and customer retention. Engage in extensive testing before launch to ensure system readiness. Focus on continuous improvement post-launch based on market feedback and performance data.

Learn about the state of wireless networking today with our guide to 5G technology and planning and predictions related to 5G adoption. Check out the differences between 5G and LTE and learn the key differences between 4G and 5G networks. Explore the four telecom infrastructure trends driving network of the future and the four different types of wireless networks.

This was last updated in November 2023

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