MVNO Benefits for MNO
Quick Summary
Partnering with MVNOs gives Mobile Network Operators (MNOs) a powerful tool to grow revenue, reduce churn, and improve profitability — without the associated marketing and operational costs.
MVNOs target niche segments that MNOs typically underserve. When those customers choose an MVNO hosted on the MNO’s network, the MNO still earns wholesale revenue — often at EBITDA margins 3x higher than retail.
Key benefits at a glance:
- Retains revenue from churning subscribers instead of losing them to competitors
- Opens 3 simultaneous revenue streams: own churners, competitor churners, and new market entrants
- Near-zero Subscriber Acquisition Cost (SAC) for the MNO
- Enables a multi-brand, multi-segment strategy without MNO operational overhead
- Proven at scale: Cell C, T2, Telefónica, BT, Vodafone, Deutsche Telekom
For the full breakdown — financial analysis, real-world case studies, and MNO quotes — read on below.
Mobile network operators (MNOs) partnerships with mobile virtual network operators (MVNOs) is a mutually beneficial arrangement that help both parties grow their businesses and improve their bottom lines.
🅐 Telecom operators cater their services and marketing to mass segments – in a so called ”one-size-fits-all approach.
Figure 1: Mobile subscribers churn to other operators.
🅑 However, customers have different taste, values and culture and some customers feel they don’t belong as the services are not aimed at them. These customers are highly likely to seek other options, and move to another operator = all revenue from these customers is lost.
The benefits for a MNO in partnering with an MVNO
This is where the value of partnering with an MVNO comes in. A MVNO will typically target niche segments where the telecom operator has less success, and thereby act as a magnet/filter, avoiding customers to churn to the competitors.
Figure 2: The MVNO can act as a filter for churning subscribers.
➊ Because the MVNO is a partner and hosted on the network of Telecom Operator 1 (MNO1), the MVNO will send back revenue to Telecom Operator 1 from these churning customers.
So even if some customers from Telecom Operator 1 decided to churn to the MVNO, Telecom Operator 1 would still make revenue on these lost customers, and this revenue would be pure profit for the operator, as the MVNO now has the associated (OPEX/CAPEX) costs e.g.: Marketing costs, Customer acquisition costs, Handset subsidies, Value-added services costs and ongoing Customer maintenance costs, etc.
Figure 3: The MVNO taking subscribers from the competition.
➋ The other Telecom operators have the exact same problem, that some of their users feel they don’t belong, and will look for other alternatives. This creates a second traffic of revenue to operator 1, who partnered with the MVNO, as the MVNO takes on some of these churning customers from the other operators.
Figure 4: New subscribers in the market.
➌ … and of course, further revenue to telecom operator 1 from new subscribers entering the market and choosing the MVNO from the start.
Figure 5: The MVNO provides the host operator with 3 revenue streams.
This provides the mobile network operator (MNO 1), who is hosting the MVNO with 3 revenue streams.
Key Takeaways
- If a host MNO customer churns to the MVNO, it’s highly likely that customer would have left anyway.
- It is better that a customer churns to a MVNO on the MNO’s own network, than to the competitor, because the MNO will still make revenue from the lost customer via the MVNO partner.
- If the customer churns to the competitor or a MVNO on the competitor’s network, all revenue from that customer will be lost.
MNO Market Approach vs. Market Segment Approach with MVNOs
MVNOs often come with a strong brand, and a niche focus that provides the mobile operator the means to minimize the impact on churn. Partnering with, and including MVNOs into its marketing mix, the mobile operator can achieve revenue from specific market segments where the mobile operator hasn’t been successful.
In saturated – or near saturated markets, as organic growth wears off, competition becomes a quest for market share, and this challenge leads MNOs to seek for MVNO partnerships to sustain the overall market growth.
Figure 6: MNO market share without, and with MVNO.
Partnering with MVNOs will allow the MNO to address specific market niches, which the MNO has not yet tapped into – incurring lower Subscriber Acquisition Costs (SAC) and add efficiency to the value chain by creating offers aligned to the needs of each of the existing segments.
Figure 7: MNO Market Approach vs. Market Segment Approach with MVNOs.
Financial benefits from MVNO collaboration
Besides being a source of growth, MVNOs are creating a significant advantages for the MNOs in terms of improving its business profitability.
Figure 8: MVNO creating advantages for the MNO in terms of business profitability.
- Subscriber Acquisition Cost (SAC) for an MNO is almost zero, as the Subscriber Acquisition Cost is transferred to the MVNO.
- Average Revenue per User (ARPU) for the host MNO, is only slightly lower with MVNO than the ARPU for the MNO without MVNO.
- EBITDA margin percentage of the wholesale business, is much higher than that of the retail one for MNOs without MVNOs.
For the MNO, the EBITDA margins for customers acquired by the MVNO is 3 times the margin from retail.
MVNOs help MNOs to drastically improve their EBITDA margins by reducing Subscriber Acquisition Cost (SAC) costs with only a slight reduction in Average Revenue per User (ARPU).
Telefónica and 1&1: A Real-World Example
A compelling example of this financial synergy can be seen in the relationship between Telefónica and 1&1 in Germany. For years, 1&1, a leading MVNO, was Telefónica’s largest wholesale customer.
The financial impact of this partnership was significant for Telefónica’s German subsidiary:
- Revenue & EBITDA: In 2024, it’s estimated that 1&1 generated between €550 million and €575 million in annual revenue, accounting for 6.5% of its total revenue. The partnership also contributed around €450 million in EBITDA, representing 16% of the subsidiary’s total.
- Free Cash Flow: This MVNO client was also responsible for between 9.5% and 11% of the company’s total free cash flow in 2024.
This case clearly demonstrates how a strong wholesale partnership with an MVNO can substantially boost an MNO’s financial performance, particularly its EBITDA and free cash flow, by leveraging existing network infrastructure.
From a Single Brand MNO to a MVNO Multi-brand/Segmentation Strategy
The multi-segment, multi-brand MVNO approach is not new, but built on experience from other industries such as the automotive industry. Today, the automotive market is heavily segmented and most car manufacturers actually own multiple automotive bands, each focused on a specific market segment with the product tailored for the unique needs of that segment.
Figure 9: Volkswagen’s shift from a single brand to a multi-brand, multi-segmentation strategy.
One of the key competitive advantages of brands is that they have a thorough knowledge of their users, allowing them to cater to that segment in a far more personal, relevant way than MNOs can, and the strategy has been adopted by various MNOs around the world.
Figure 10: Example of MNOs who have adapted the multi-segmentation MVNO model via MVNA/MVNE partners.
CELL C’s MVNA / MVNE / MVNO Model
In July 2016, Cell C revealed that it’s MVNO partners had managed to attract more than a million customers. Cell C’s had invested in MVNE platform partners, which allowed them to launch MVNOs in a very efficient manner.
- The MVNOs owns the customers
- Services are offered under the MVNOs brand
- The MVNOs design and decide the tariffs
- Customer relation is managed by the MVNOs
- The MVNOs is in charge of marketing, distribution, customer insights
Cell C’s CEO at the time, Jose Dos Santos said: “Cell C has created a focused strategy to embrace sound partnerships with exceptional brands. This has allowed us to grow the MVNO base substantially.”
Figure 11: MNO CELL C’s multi-segmentation MVNO model.
As of 2025, Cell C has successfully transitioned to a capital-light, virtualized network model, utilizing roaming agreements with MTN and Vodacom to provide nationwide coverage and 5G readiness without the burden of maintaining physical towers. This shift has established wholesale and MVNO services as a primary growth engine for the group.
Figure 12: Cell C subscriber segmentation and MVNO volume growth.
The subscriber decline observed between February 2023 and May 2023 was the direct result of the fundamental structural transition. Cell C successfully restructured from a traditional MNO, burdened by the capital-intensive demands of owning spectrum and physical infrastructure, into a capital-light, virtualized network model.
As of November 30, 2025, Cell C reported strong performance in its wholesale segment, with revenue increasing 22.5% year-on-year to R840 million (USD 52 million). The company supports over 5.1 million MVNO Home Location Register (HLR) subscribers, representing a 29.6% increase compared to the previous period.
Today, Cell C’s platform enables major South African brands such as FNB Connect, Capitec Connect, and Mr. Price Mobile, allowing these partners to own their customer relationships and tailor mobile offerings while leveraging Cell C’s scalable infrastructure.
Cell C and the MVNO Growth Engine
The MVNO strategy acted as the anchor during this transition. While the company shed unprofitable retail volume to reduce its capital burden, the MVNO HLR segment remained resilient and continued to grow. This demonstrates that for Cell C, wholesale services are not just a secondary offering but the primary growth engine, shifting the business toward an agile, high-margin future.
MVNA / MVNO strategy pays off for Tele2 Russia
In May 2017, Russian operator Tele2 launched its “MVNO factory” strategy. The strategy enabled Tele2 to host a range of MVNOs in various niches.
The “MVNO factory” has been a vital part of the operators rapid growth in the market. In the period 2017-2018 the overall MVNO subscriber base in Russia grew to 3.2M with Tele2´s MVNOs accounting for 1.75M of those, representing a growth of 75%
At the end of 2019 – Tele2 had 21 MVNOs in the “factory”, serving 3.75M subscribers out of 10M total MVNO subscribers in the market (4% of total mobile subscribers in Russia), increasing Tele2’s revenue from the “factory” 133% year on year.
As of December 2020, Tele2 MVNO partners served a combined subscriber base around 4.5 million. The MVNOs include: Rostelecom, Sberbank, Virgin Connect, Tinkoff Bank, Centr2M, MS-SpetsTelecom, MCN Telecom, TTK, Easy4, SIM SIM, V -Tell, Gazprombank, VTB Bank and others.
Figure 13: Tele 2’s multi-segmentation MVNE/MVNO factory
See Related: Mobile Virtual Network Enabler (MVNE) | A Comprehensive Guide for more case stories of MNO/MVNE partnerships.
What the mobile operators are saying about MVNO partnerships
Source: MVNOs and operators: An evolving market (Capacity Media)
MVNO / MNO Benefit Conclusion
Network operators are continuously investing heavily into spectrum licenses and infrastructure to keep up with demand and new technology. These new investments are resulting in capacity which needs to be fully utilized, as much and as soon as possible. A MVNO strategy can fill this gap and generate economies of scale for better network utilization and sustainability.
A MVNO partnership brings the following benefits and opportunities for the mobile operator.
Financial Benefits: New revenue streams • Higher margins • Quicker return of investment • Reducing costs (increasing the EBITDA).
Strategic Benefits: Niche segment tapping • Use MVNOs in segments where the competitor is strong • Obtain greater share of the total market traffic • New distribution channels, reach new consumers in unserved/underserved market segments.
Operational Benefits: Network utilization • Share business processes to increase overall performance.
Sustainability + ESG: The operators network and capacity is setup to take a certain amount of usage + peak, this wasted capacity is being “produced” daily. MVNOs are paying for and putting this wasted capacity to use.
Marketing Benefits: Minimize churn • Grow market • Cross-sell • More value, innovation and choice for the end-users • Saved retail costs can be used to increase customer retention.
If you are ready to evaluate or launch an MVNO strategy, explore our MVNO consulting services to maximize your network assets or learn more about the evolving landscape in our guide to MNO & MVNO Partnerships: From Old Fears to New Revenue.
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