An MVNO is a Mobile Virtual Network Operator. It’s a company that offers mobile services like calls, texts, and data. An MVNO doesn’t own its network infrastructure, such as cell towers. Instead, it buys network capacity from a traditional mobile network operator (MNO) at a wholesale rate. The MVNO then resells this service under its own brand, allowing it to offer competitive plans to consumers under its own brand.
How an MVNO operates
An MVNO has no physical network infrastructure. Instead, it signs a wholesale agreement with a traditional MNO. This agreement allows the MVNO to lease network access from the MNO. It buys voice minutes and data in bulk at a low cost. Then, it resells those services to its own customers. MVNOs can set their own pricing and create unique plans.
Types of MVNOs
There are three different levels of control an MVNO can have over its services.
Full MVNO
A full MVNO has its own SIM cards and core network. It is responsible for customer service and billing.
Light MVNO
A light MVNO handles customer service and branding. The MNO manages the core network.
Branded Reseller
This type has the least control. It uses the MNO’s brand, billing, and customer service. It only focuses on marketing the MNO’s services.
Benefits and Challenges of Being an MVNO
MVNOs offer unique advantages but also face certain hurdles.
Benefits
- Lower CapEx: MVNOs don’t need to spend billions on building their own physical networks. This low capital expenditure allows them to launch services quickly.
- Niche Markets: They can focus on specific customer groups, like budget-conscious users or international travellers, helping them stand out from large MNOs.
Challenges
- Reliance on MNOs: MVNO service quality is directly tied to the MNO’s network performance. If the MNO has an outage, the MVNO’s service is also affected.
- Limited Control: MVNOs have limited control over the network they use, including network upgrades and maintenance.
- Competition: They must compete directly with the very MNO they lease from, which can be difficult due to MNOs’ marketing power and economies of scale.
Examples of MVNOs
There are many well-known MVNOs locally and across the globe.
Local
- FNB Connect: This MVNO is run by a major bank. It offers mobile services as a way to add value for its banking customers.
- Shoprite k’nect mobile: This service is from a large retailer. It focuses on affordable data and airtime. Customers can earn loyalty rewards.
Global
- Lyca Mobile: A well-known global MVNO. Lycamobile specialises in low-cost international calls. It serves migrant communities.
- Giffgaff: Operating in the UK, Giffgaff is famous for its community-based model. It offers flexible plans and peer-to-peer customer support.
Relevant Solutions for MVNOs
MVNOs are lean and agile and they need specific IT solutions to thrive. Adapt IT Telecoms provides APN and AAA for secure data and user management, and VAS (Value-Added Services) like mobile money to help MVNOs stand out.
