Wholesale & MVNO
Unlocking the potential of networks
RDC has unparalleled expertise in wholesale and MVNO consulting. We negotiate win-win wholesale agreements with operators and ensure connectivity between fixed-line, cellular and satellite. We have launched successful MVNOs and operator sub-brands. Plus developed wholesale platforms for MVNOs and MNOs looking to launch sub-brands. Further, we negotiate profitable airtime deals service providers. This expertise means that RDC has performed the world’s largest number of MVNO projects.
We also have unrivalled knowledge on MVNO and operator sub-brands stored in our database. We provide up to date metrics and insights on the MVNX ecosystem (MVNOs, MNOs, MVNEs, MVNAs) and any mobile innovator on networks (MIONs). Our infomation covers the number of MVNOs and sub-brands in specific countries and regions. Plus their host network, technologies used, subscriber numbers and more. This information is hugely valuable for M&A activity, new market entry, proposition development and negotiations.
We create disruptive wholesale and MVNO consulting strategies by encouraging players to shift away from siloed thinking. Our ethos is to embrace a wider ecosystem. We incorporate e-commerce, social media platforms, payment systems, app developers, retail players, and content creators in our solutions.
To demonstrate our thought leadership in this area, we have developed the MIONs (Mobile Innovators on Networks) concept. We place the most emphasis on the role of well-executed cloud-based platform architecture. Mobile wholesale is evolving beyond traditional MVNOs to include a new breed of innovators that we term MIONs. These are IoT, over-the-top, app providers and brands wanting to control their connectivity. By thinking of MIONs as one group with a common set of needs, the industry, and platforms in particular, can provide a more integrated and standardised approach.
What are MVNOs?
An MVNO is a carrier that does not have its own wireless network. Instead, it borrows the signal, coverage and network of a larger carrier. Some MVNOs rely on a combination of networks to support their signal. While MVNOs receive the same speeds and overall benefits, they don’t get the same priority on their parent networks. As MVNOs don’t need to worry about network maintenance, they can focus more heavily on niche segments and services.
MVNO started in order to achieve two aims: to use excess capacity and to increase competitiveness in the markets. Through MVNOs, wholesale has evolved from voice only focus. Now it includes mobile data, messaging, fixed broadband, IoT services and more.
What does an MVNO do?
MVNOs build value and develop positive brand experiences. They achieve this through marketing and promotion, client billing and invoicing, subscriber network registration, offering services (e.g., balance checks, top-ups, customer care, SMS capabilities, data) and distribution of assets like SIM cards and mobile phones.
The key differentiator between MVNO and MNO is ownership of network infrastructure. MVNOs don’t invest in mobile network infrastructure, instead they focus on providing services to support their clients.
Why provide wholesale and support MVNO?
Mobile operators host MVNOs for two main reasons:
To reach non-targeted segments
MNOs can target customers outside their traditional base with MVNOs. Best practice is to partner with a large customer base MVNO (e.g. fixed-service providers).
Leveraging infrastructure to create additional revenue streams
Mobile network infrastructure usually has more capacity than users at any given time. Greater revenue can be generated by selling unused bandwidth to MVNOs.
Wholesale & MVNO in today’s world
In five years, global consumer wholesale connections will double to over 1bn. Further, IoT wholesale connections will increase 7 fold to over 2bn.
We see wholesale growth coming from three key areas:
- Lifestyle services
- IoT (Internet of Things) services
- Converged media giants.
Big brands want to deepen customer engagement through connectivity. This will be achieved with innovations in healthtech, fintech, education and entertainment.
Meanwhile, IoT is exploding thanks to low device costs and increasing 5G coverage. This is generating new applications and as a result, new businesses are being unveiled every day. Finally, higher bandwidth, expanded coverage and increased capacity will open new opportunities in streaming entertainment such as virtual reality and eSports.
Mobile operators must embrace new wholesale partnerships and business models. Only then can they leverage this growth in connections and monetise network capacity.
What kinds of MVNOs are there?
MVNOs classification depend on their capabilities. The range varies from full MVNOs to branded resellers. A set of platform business called Mobile Virtual Network Enablers (MVNEs) act as a bridge between MVNO and MNO, they offer network infrastructure and related services, such as provisioning and OSS/BSS services. Further, Mobile Virtual Network Aggregators (MVNA) reduce complexity in airtime negotiations with the MNOs.
Brand Resellers leverage brand name and distribution channels to acquire new and onboard existing customers. Their only role is maintaining the relationship with customers through marketing, sales and distribution.
An example of a brand reseller is Red Bull Mobile, a brand that focus on youth and people who are interested in extreme sports.
Light-MVNOs fall in between Branded Resellers and Full-MVNOs. They manage sales and marketing, back-office processes, lifestyle services and operations.
In the UK, Lebara Mobile is a good example of Light MVNO, originally focused on the ethnic and international calling market, it is changing its positioning in order to target a broader audience.
Full-MVNOs are responsible for operations, customers, and data. They have full control over the services and products they offer, as well as flexibility in designing and deploying new services. As a result of this flexibility, they require greater investment.
The Full MVNO has switching and transmission infrastructure allowing it to manage its own traffic. Full MVNOs can administer numbering resources, customer service, lifestyle services, roaming, SIM and device management. The primary difference between a full MVNO and an MNO is access to spectrum and radio access network (RAN), this remains in the hands of the MNO which leases access out to MVNOs.
The largest full MVNO is Lycamobile. Present in over fifteen countries, it serves four million plus customers, its main focus in on the ethnic and international calling market.
Sub-brands are MNO-owned subsidiaries created to target specific customer segments. They have a distinct proposition and brand from their parent MNO. They are usually included in the MVNO conversation but are not technically MVNOs. A recent trend across markets has seen operators acquiring successful MVNOs to integrate them into their brand portfolio.
Mobile Virtual Network Enablers or “MVNEs” provide infrastructure for MVNO operations and can also provide value-added services and/or back-office processes to MVNOs. These solutions make it possible for “in-a-box” MVNO models to be offered to smaller MVNOs, accelerating market access for more brands.
Wholesale & MVNO trends to watch
1. MVNOs addressing specific market segments and value propositions
By focusing on specific value propositions for niche customer segments, MVNOs bring additional groups into the subscriber base of the host operator network. This is achieved without diluting the focus and brand image of the host – in effect the MVNO acts as a “sub-brand” for the operator and helps to bring mobile services to diverse populations.
MVNO service offerings have shifted from voice and text into data. MVNOs with a parent company in another industry have also built innovative propositions using vertical integration with the their parent companies’ other goods and services. For example. industries like gaming or enterprise cloud services are ripe for this strategic play. We can find another example in the consumer space, where convergence of fixed, mobile and content services help to improve stickiness and reduce churn. Cable companies are expanding into mobile through MVNOs to enter the market faster and more cheaply than they would be able to building a network themselves.
The move into industrial digital transformation will see industry specific MVNOs targeting IoT and global connectivity. This will spark growth in the out-of-the-box model for connectivity, bundling together devices and other services.
3. New technology enablers are driving opportunities for MVNOs
New technology enablers, such as cloud-based infrastructure, are allowing MVNOs to launch and operate their own mobile networks more easily and cost-effectively. This is enabling MVNOs to offer new and innovative services to customers, such as tailored plans and specialised customer service. Additionally, 5Gs increased capacity and faster speed can support new data intense services and applications. Some technology enablers include:
- e-SIMs enable out-of-the-box connectivity and provide improved ease of use, especially for IoT devices MVNOs focused on IoT delivery
- Artificial Intelligence (AI) and machine learning with data analytics supports improved customer personalization as well as more efficient operations for MVNOs. Costs are lowered and MVNOs have an increased investment appeal
- Edge computing means that MVNOs can use either their own or their host networks distributed computing power. This allows data processing to take place closer to where it is collected, reducing distance travelled from device to data centre or cloud, improving latency
- 5G will enable a new generation of MVNOs. Through increased bandwidth more data-intensive services such as high-definition video streaming and gaming will be possible. 5G networks also have greater capacity, allowing MVNOs to connect more devices and users at the same time. This, and reduced latency, will open up new revenue streams in IoT and M2M services.
New technology enablers are helping MVNOs become more competitive in the mobile market and better serve the needs of their customers.
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