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5G MVNO’s: Opportunities and Challenges

Telecommunications Software Solutions

5g mvno

The introduction of 5G mobile technology is set to transform the role of mobile in society, as it opens up opportunities for enhanced connectivity and drives growth across industries and economies. Globally, this provides an opportunity for Mobile Virtual Network Operators (MVNOs) to expand their current business models, mobile services and offerings to transform to 5G MVNOs. This shift is not something that will happen overnight but instead will gradually occur over time and one that will need to overcome several industry related challenges.

How is 5G set to change the mobile world as we know it?

With a move towards 5G service in different parts of the world, industry leading MVNOs which include T-Mobile, Google Fi, Virgin Mobile, are looking to use this innovative technology to create an agile, purpose built network. Ultimately building a network tailored to the different needs of citizens and the economies that they function in.

According to GSMA, deploying 5G is an opportunity for operators to move beyond connectivity and collaborate across sectors such as finance, transport, retail, and health to deliver new, rich services to consumers and businesses. The introduction of developing 5G MVNOs will see the mobile industry strive to:

  • Provide boundless connectivity for all5G networks will coexist with 4G networks and alternative network technologies to deliver an unlimited, high-speed, reliable, and secure broadband experience, as well as support a plethora of use cases for society.
  • Deliver sustainable network economics & innovationThe mobile industry will strive to cost-effectively deliver better quality networks, either independently or through sharing and partnerships. 5G era networks will rely on a combination of established and innovative technologies, and use both licensed and unlicensed spectrum, across different spectrum bands.
  • Transform the mobile broadband experience5G networks will provide an enhanced broadband experience with speeds of up to 1GB per second and latency of less than 4 milliseconds, as well as provide the platform for cloud and artificial intelligence (AI) based services.
  • Drive growth in new use cases for massive and critical IoT5G era networks will support the massive rollout of intelligent IoT connections for a multitude of scenarios and provide an enhanced platform to support the widespread adoption of critical communications services.
  • Accelerate the digital transformation of industry verticalsThe mobile industry will provide the networks and platforms to accelerate the digitisation and automation of industrial practices and processes (including supporting the Industry 4.0 goals).
5g mvno opportunities

The implementation of 5G networks is set to change the world, especially how we connect and use our mobile phones. According to GSMA, the mobile industry is committed to 5G and, eventually, 5G networks will replace legacy 2G/3G/4G networks. This shift has already been seen in countries like China and the USA who have been early adopters of 5G technology. There is no doubt that 5G is the future, but what opportunity does it provide for MVNO’s striving to become 5G MVNOs?

What opportunities does 5G provide for MVNO’s?

  • MVNOs have an opportunity to innovate and differentiate themselves from their competitors by using the “network slicing” capabilities of 5G technology. According to GSMA, network slicing is the embodiment of the concept of running multiple logical networks as virtually independent business operations on a common physical infrastructure in an efficient and economical way. With network slicing, the 5G network can adapt to the external environment rather than the other way around.
  • 5G offers the ability to “slice” the network and assign each part a specific quality of service to fit a use case. These mini networks would each offer a specific level of bandwidth, quality, latency, security and reliability, depending on the use case or service needed. MVNO’s will then be able to target various applications and markets as well as create an opportunity for new revenue streams.
  • MVNO’s will ultimately be able to customise the compute, storage and networking functions of their infrastructure to offer bespoke networks to customers across various industries. They would then be able to offer customers access to highly customised networks tailored to their specific requirements in a cost effective, timely and efficient way which can be governed by a service level agreement.

This provides a whole new avenue for MVNOs to expand into different industries and sectors in order to grow their business and increase revenue.

5g mvno challenges

What are the challenges of 5G for MVNO’s?

There is no doubt that there is enormous potential for MVNOs in the realm of 5G. But this potential is being met with several challenges due to the infancy of 5G deployment. With new technology comes new challenges, and this is no different for 5G. In the case of MVNOs these challenges include:

  • Dependency on host Mobile Network Operators (MNO) – it is no secret that MVNO’s are dependent on MNO’s. MVNO’s are often only granted access to innovative technology long after the MNO’s have launched them. For example, Asda Mobile MVNO only gained access to 4G five years after LTE was first launched in the United Kingdom. One of the concerns around MVNOs and the implementation of 5G is that MNO’s may not offer MVNO’s 5G capabilities when they are available. If MNO’s do not grant access to 5G, MVNOs will be left behind.
  • Infrastructure and new business model challenges – in order for MVNOs to really take advantage of 5G and network slicing opportunities they would need to develop an innovative new business model and infrastructure. If MVNOs own a 5G network slice, as a 5G MVNO, they would need to deploy their own virtual network functions and provide new applications and services for consumers.
  • Handset challenges – 5G is still in its infancy stage, which means that the number of 5G mobile handsets available are limited and incredibly expensive. For example, US mobile providers, Simple Mobile and StraightTalk, are said to sell the new Samsung Galaxy S20 for USD$1,000, which limits accessibility due to the high cost. But according to Mobilise Global, this is set to change over the next few years with 5G handset sales (15–20 million units)  said to represent approximately 1 percent of all smartphone sales in 2020, with sales taking off in 2021, the first year in which retailers will sell more than 100 million 5G handsets. There is also a question around whether there will be extensive or meaningful 5G network coverage available anywhere to enable users to take advantage of the benefits of MVNOs developing into 5G MVNOs.

Conclusion

5G is still in its infancy stage and over the next five years is expected to grow exponentially, which poses an opportunity for MVNOs to innovate and create new customer centric service offerings. This opportunity does not come without its own set of challenges relating to dependencies on MNO’s, infrastructure, the need for new business models as well as accessible and affordable mobile handsets. 5G is a worthwhile investment for MVNOs looking to cement their place in the future of mobile. 5G is here to stay, and for those willing to innovate and expand to being 5G MVNOs, it could be the revenue stream necessary for success and growth.

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