Mobile virtual network operator
A mobile virtual network operator (MVNO) is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers. An MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently.[1] An MVNO may use its own customer service, billing support systems, marketing, and sales personnel, or it could employ the services of a mobile virtual network enabler (MVNE).[2]
History[edit]
MVNO agreements with network operators date back to the 1990s, when the European and Australian telecom markets saw market liberalization, new regulatory frameworks, better 2G network technology, and a subsequent jump in wireless subscriber numbers.[3][4] Though the new 2G networks more efficiently managed the limited frequency bands allocated to wireless service, new mobile entrants were still limited by their ability to access frequency bands in a restricted spectrum.[5]
In 1997 Vodafone Australia and TotalTel launched FastFone, the world's first true prepaid MVNO utilising the worlds first fully MNO integrated MVNE platform supplied by Isoton (formerly Steadycom). FastFone's MVNO model was very successful, attracting more than 300,000 subscribers in 18 months. Vodafone purchased the business in 1999.
With European markets newly open to competition and new technology enabling better service and cheaper handsets, there was a massive surge in demand for cellular phones.[4] In the midst of this swell, Sense Communications fought for access to mobile network operator (MNO) spectrum in Scandinavia in 1997.[6] Sense was able to establish an MVNO agreement with Sonera in Finland, but it failed to persuade MNOs in Sweden, Denmark, and Norway.[7] Sense then appealed to EU regulators, citing provisions that required certain MNOs to allow new entrants interconnection. While Sense's claim was denied, in November 1999, the company signed a service provider agreement with Telia/Telenor Mobile for GSM network capacity access, allowing Sense to offer services to its own customers in Sweden and Norway.[8]
Despite Sense's initial failure, the regulator in Denmark saw the promise in the MVNO model as a cost-effective route for telecom companies to enter the market and in May 2000, legislation passed that required network operators with significant market power to open up access to their infrastructure.[9] By August of that same year, the MNO SONOFON had solidified the first viable MVNO agreement with Tele2. This agreement provided Tele2 with access to SONOFON's network for both mobile and roaming services, the latter of which had been requested by (and denied to) Sense Communications. With the new regulations in place, MVNOs in Scandinavia eventually grew to a market share of above 10%.[10]
By 2008, US wireless subscribers had a choice between around 40 MVNOs. According to the FCC, approximately 7% of all U.S. mobile subscribers were served by resellers, including MVNOs, and analysts found that the 15.1 million wireless subscribers served by resellers by the end of 2006 had increased by 1.6 million over the previous year.[11]
Regulation[edit]
In 2003, the European Commission issued a recommendation to national telecom regulators to examine the competitiveness of the market for wholesale access and call origination on public mobile telephone networks.[28] The study resulted in new regulations from regulators in several countries, including Ireland and France forcing operators to open up their networks to MVNOs.[29][30]
Jordan's top watchdog issued its first MVNO regulations in 2008, facilitating the creation of the first MVNO in the Arab world in 2010.[31]
The Saudi government is making preparations to permit MVNO services in the country.[32]
In Brazil, MVNOs are regulated by Anatel, the Brazilian Agency of Telecommunications, in November 2010. As of September 2014 the combined market share of all Brazilian MVNOs was just 0.04%.[33]
In Thailand, five MVNOs were given a Type II license to operate on the 2100 MHz 3G network of state telecom service TOT Public Company Limited (TOT) in 2009. As of January 2017, two of the original five MVNOs are still in service.[34] As of December 2018, the National Broadcasting and Telecommunications Commission (NBTC) had issued 58 MVNO licenses in Thailand, a total of nine have launched, four remain active.[35]
In India, the Telecom Department under the Ministry of Communications and Information Technology, accepted a recommendation from the national telecom regulator, Telecom Regulatory Authority of India, to permit VNOs in the country, and announced the grant of a unified license for Virtual Network Operators on 31 May 2016.[36] VNOs have formed an association to represent current regulatory issues impacting their MVNO business viability.[37]