What is it and how does MVNO work?

JSC Ingenium - Glossary: What is it and how does MVNO work?

Thanks to new business models in telecommunications, new companies have emerged that allow managing technologies for mobile telephony. One of them are MVNOs or mobile virtual operators. They are operators that have developed under various approaches of competitiveness and quality, offering new telecommunication services and using access networks of large companies with their own network.

Definition and concept of MVNO

Mobile virtual operators (MVO), commonly referred to in English as MVNO, Mobile Virtual Network Operators, are a type of operator that offers wireless telephony services using the infrastructure of large companies. MVNOs do not have a concession to use their own radio frequency, instead they use companies with their own networks, to which they can subscribe through prior agreements that guarantee a quality of service.

These companies do not have the same commitments or the same legal obligations, so their operating expense is lower, which allows them to offer services to customers with higher benefits and more competitive prices. Similarly, there are MVNO operators that have their own technical departments, and that also make their own SIM cards, enjoying greater flexibility as network

How does a mobile virtual operator work?

MVNOs work through mobile operators that purchase large services and data packages from a provider, and market them with a value proposition, satisfying the needs of a group of users and taking advantage of the differential obtained through the acquisition of large volumes of consumption.

Mobile virtual operators can be classified into 4 large groups:

  • Distributors of MVNO brands: network owners facilitate the products and services they can offer.
  • Full MVNO: has access to the company’s infrastructure, offering any type of service.
  • Light MVNO: offers equipment billing and sales services.
  • MVNO Enablers: offer business opportunity for the search for customers.

While MVNOs are a commercial figure found in various countries, in Spain, where the first licenses were granted in January 2001, there are two types of telephone operator companies: operators with their own network and mobile virtual operators, who have access to the system thanks to the regulation of the country itself. Among the main operators in Spain with their own network for mobile phone networks there are: Movistar, Vodafone, Orange or MásMóvil, among others.

Similarly, among the virtual mobile operators that work without their own network in Spain, there are: Amena, Lowi, Jazztel or Yoigo, among others.

Why a MVNO?

MVNOs can have high flexibility to offer new products and services. They were originally created to expand the capacity of MNOs (mobile network operators) by offering simple and direct telecommunications services. Some MVNOs have gradually reached considerable sizes, but their size and flexibility also allows them to meet the needs of niche markets: the SME market, the tourism market, the “ethnic” market (calls to countries of origin), cooperatives, etc.

Today, most European countries (and many other countries in the world) have implemented the MVNO model. In approximately 20 years of existence, it has proven to be an extraordinary tool for entrepreneurs and innovative brands.

JSC Ingenium is an international benchmark as a Network Infrastructure provider. Its technology is specially designed for MVNOs and currently has operational deployments in 15 countries and serves more than 40 Mobile Operators, including both Network and Virtual Operators.