<- Blog

MVNO (Mobile Virtual Network Operator): Turning Opportunity into Business

In this blog post we’re going to explore latest driving factors for the global mobile virtual network operators market. Our material will help you deepen your knowledge of what is MVNO, it’s current business models, benefits and opportunities for business.

The growing demand for communications services with better networking capabilities is primarily driving the global mobile virtual network operators market. In addition, the growing popularity of digital services, including cloud solutions, machine-to-machine (M2M) transactions, mobile money, etc., is another important factor driving growth. As stated in GlobeNewswire Research Report, The global Mobile Virtual Network Operator (MVNO) market size is projected to reach US$ 70260 million by 2028, from US$ 50730 million in 2021, at a CAGR of 4.3% during 2022-2028.

MVNO providers offer mobile network operators (MNOs) financial advantages through the development of new revenue streams, higher margins, and faster return on investment. In addition, the competitive advantages offered by MVNOs allow you to tap into a niche segment and increase your share of the overall market traffic. In addition, some of the organizational benefits offered are increased overall efficiency through business process sharing and networking.

Since its launch, MVNO companies have successfully helped hundreds of telecom operators establish relationships with MVNOs. Businesses use them for various purposes such as business development, sales, marketing, B2B networking, and event invitations.

What is MVNO (mobile virtual network operator)?

A mobile virtual network operator (MVNO) is a company that doesn't have its own telecommunications infrastructure. Therefore, it rents it from mobile communication companies and works on their basis under its own brand. In fact, the virtual operator buys large amounts of traffic from mobile operators at a wholesale price. And resells it at retail to the final consumer.

If you want to know more about the definition and history of MVNO, read our previous blog post. In this article, we will dive into the topic.

You will learn about the existing MVNO business models, how evolved their use is in the world, the market landscape, and which companies are leading the industry.

MVNO business models

The Telecom industry has long used the mobile virtual operator MVNO business model, which doesn't have its own radio access network and radio frequencies allocated to it. The MVNO uses the conventional mobile network operator (MNO) infrastructure to provide communication services. Depending on the business model, the MVNO companies may also use other network operators' infrastructure elements. The figure below shows the existing MVNO business models.

Branded reseller is engaged only in the sale of communication services, the entire network infrastructure: radio access network, core network, operations, and business support systems is leased from the MNO operator. The reseller buys MNO traffic in bulk, sells it at retail to subscribers that he finds on his own, and makes a profit from the wholesale-retail difference.

Light MVNO is intermediate between "brand reseller" and "full MVNO". Light MVNO partially uses base operator infrastructure elements, along with its own components. This business model doesn't give ownership of the network infrastructure but gives ownership of the client and the intelligent network platform, as well as partial ownership of the value-added services (VAS) platform.

Full MVNO owns all elements of the operator's infrastructure, except the ownership of the radio access network. This part is rented from the main operator. In this case, the full MVNO receives the benefits associated with owning the network switching infrastructure and also bears the cost of these network elements. Full MVNO Is a model suitable for companies that are eager to fully exploit the power of telecommunications, differentiate through innovative services, grow the existing customer base, and create and expand into new markets.

Mobile Virtual Network Enabler (MVNE) is a special kind of virtual operator, which, as an aggregator, works with several network operators and provides services for many users of communication services, both individual and corporate.

Virtual Operators worldwide: a short overview and expansion prospects

The highly competitive global mobile virtual network operator market consists of several major players such as Virgin Media Business (UK), DataXoom (US), Lebara (UK), KDDI (Japan), and Asahi Net (Japan). In addition to the above companies, Virgin Mobile USA (USA) holds a significant market share of global mobile virtual network operators.

Source: Mordor Intelligence

The Mobile Virtual Network Operators market is highly competitive, primarily due to the presence of many players in the market. Major players in the market are implementing strategies such as service innovation, and strategic partnerships to expand their customer base and remain competitive in the market.

The Asia-Pacific region accounts for a significant market share, as the country has always been at the forefront of technological advancements such as 5G technology, connected mobile devices, and smartphone proliferation.

Increased demand in countries such as India and Indonesia, where smartphones are increasingly used in rural areas as local governments promote the digital and mobile economy, is likely to drive demand for the development of MVNO connections.

The key factors positively influencing the growth of the global mobile virtual network operator market are segment-driven pricing and creative marketing strategies, as well as increasing mobile device penetration and demand for low-cost mobile services. Growth in the use of data and value-added services such as live streaming and mobile commerce-based services is expected to drive the mobile virtual network operator market. The growing adoption of smartphones around the world and the resulting increase in the mobile user base is predicted to make a significant contribution to the growth of the market in the near future.

MVNO's benefits

In using MVNO for business the following benefits can be identified:

  • High customer focus: a wide range of services for specific tasks and goals of the subscriber.
  • Beneficial tariff systems within the network, such as corporate tariff plans.
  • Possibility of personal and round-the-clock support.
  • Large network coverage area. Some virtual operators cooperate with several mobile operators at the same time.
  • Opportunity to conclude short-term contracts and purchase disposable SIM cards.
  • No roaming when calling from a virtual number via IP telephony.

More opportunities that can give you a mobile virtual network operator

There is a gaming profile called "freemium" and businesses see it as a way to increase revenue exponentially. When a user downloads a free game from the app store, they are given the option to pay for premium upgrades. Sometimes games allow limited updates if you're willing to watch 15-30 second ads.

How does this scheme work for businesses? Users subscribe to the brand's services, which typically today include an unlimited data plan for calls, texts, and voice messages. In exchange for a lower plan cost, MVNO users are encouraged to watch up to 45 seconds of ads immediately after signing up for the service. They then subscribe to watch more videos every hour throughout the day

Some might think that this business model is not suitable for an MVNO, but it works. Promotions help cover costs, and the added benefit is that the required engagement results in a higher CTR for advertisers. This means that companies using the MVNO can charge higher advertising rates because they can show better results. It also creates the basis for entering the international market.

Nov 03,2022 ● 5 min read

More from our blog

The Importance of SS7 Stack in Mobile Networks
May 08,2023 ● 7 min read

This article comprehensively summarizes the SS7 stack's significance in mobile networks, including its architecture and diverse range of services.

Read now ->
Innovative Technology and MVNO Success: How Cutting-Edge Software Solutions are Revolutionizing the MVNO Landscape
Apr 18,2023 ● 8 min read

The mobile virtual network operator (MVNO) industry has experienced enormous growth and evolution in recent years as a result of the rising demand for reasonably priced mobile services and the widespread use of smartphones. As a result, MVNOs are growing to be an essential player in the telecom industry, and numerous operators are making an effort to differentiate themselves through cutting-edge technological advancements.

Read now ->
MVNO Best Practices: Strategies for Building and Sustaining a Successful Mobile Virtual Network Operator
Apr 10,2023 ● 7 min read

In this comprehensive article, we will delve into the various essential strategies for creating and maintaining a thriving MVNO.

Read now ->

Start innovating with Mobius

What's next? Let's talk!

Mobius Software

As a company you'll get:

  • Get started quickly

  • Support any business model

  • Join millions of businesses

Questions? websupport@mobius.com