How Does MVNO Operate Without Network Infrastructure?
MVNO stands for mobile virtual network operators. An MVNO is a company that does not have its own mobile spectrum license, but it sells mobile services under a brand name by utilizing a network provided by the licensed mobile operator. In simpler terms, MVNOs can be a reseller of wireless communications services.
Europe-based MVNO industry is projected to generate $48,762.8 million revenue by 2030. MVNOs offer mobile services under a brand name, by implementing their own marketing, and tariff structure, with the usage of the sophisticated CRM system. On the other end, companies hold their own core network infrastructures and have network infrastructure which controls their elements including MSC and HLR, along with their own products.
MVNOs can help in marking down the retail prices to an extent, as they are not required to pay for radio frequency spectrum licenses, and do not have any infrastructure that needs to be built or maintained. That is why MVNOs have low overhead, they focus on spending on marketing to improve their sales and increase their consumer base.
MVNOs usually provide prepaid wireless plans on the basis of subscriptions. It may directly control the sales and customer service, or by another entity known as a mobile virtual network enabler or MVNE. They usually specialize in administering mobile services, and marketing.
There are usually four types of mobile virtual network operators. They usually have a similar set of characteristics that make them unique.
MVNOs usually function under these brands which have:
• Those which have a larger consumer base
• Those with loyal customers make it easy to sell white-labeled mobile network services and products.
• Those brands have large capital or access to capital for investing in the front-end systems to deliver to the consumers.
For instance, Tesco, operating as a large multinational supermarket chain, owns a large consumer base. By utilizing the brand name and reach, Tesco enhances its brand affinity to provide consumers with conventional mobile network deals.
Functions of MVNO
MVNO does not invest in the mobile network infrastructure, but it offers various essential services which support the clients. Such services require MVNOs for providing value and positive brand experiences:
MVNO markets and promotes products
• It manages bills and invoices of clients for services.
• It provides the network with subscriber registration.
• It provides subscribers with the services such as network top-ups, SMS capabilities, customer care, and balance checks.
• It distributes assets such as SIM cards and mobile phones.
The major MVNOs companies operating in the industry are Verizon Communications Inc., Lycamobile Group, Truphone Limited, BT Group plc, ASDA Stores Limited, Voiceworks BV, and Giffgaff Limited.
The demand for MVNO is rising due to the increasing adoption of segment-targeted pricing, rapid deployment, innovative distribution strategies, and the growing requirement for triple-play economies in the emerging economies of Europe.
In addition, the growing penetration of mobile devices and rising low-cost mobile services lead to increasing adoption of MVNOs services.
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