ITU: How mobile virtual network operators (MVNO) drive value and improve lives

ITU: MVNOs drive value and improve lives

In an increasingly digital world and fragmented telecommunications industry, mobile virtual network operators (MVNOs) are on the rise, applying emerging technologies, exploring new verticals and offering value to both consumers and existing mobile network operators (MNOs)

Together with mobile virtual network enablers (MVNEs), which provide network infrastructure and related services to MVNOs, MVNOs allow carriers to expand into new geographic areas and offer unique features and products, increasing connectivity and responding to niche consumer demands.

These are the words in the lead paragraph from a very interesting ITU News article: How mobile virtual network operators MVNOs drive value and improve lives. ITU News is a service of ITU, the United Nations’ specialized agency for ICT.

The International Telecommunication Union (ITU) and MVNOs

MVNOs are joining ITU in increasing numbers and was also the subject of the workshop “Rise of the MVNOs: Leveraging MVNOs in an ‘everything connected’ world” at ITU Telecom World 2018 in Durban, South Africa last fall.

The participants of the workshop, included industry leaders, government officials and representatives from MVNOs, MVNEs, and MNOs, which also collaborated to create a roadmap for strategic alliances between MVNOs, verticals and other industry players.

The workshop examined the relationships of MVNOs with verticals including banking, utilities, agriculture, transportation and Smart Cities, and explored opportunities of emerging technologies including the Internet of Things (IoT), machine-to-machine (M2M), blockchain, 5G and Artificial Intelligence (AI).

“More and more companies are sharing the networks in order to lower costs, maintain profit margins and focus on innovative services to meet shifting customer demands. This dynamic requires unprecedented collaboration. Incumbent mobile network operators are increasingly working with mobile virtual network operators (MVNO) and enablers (MVNE), tower companies, Internet companies, and a growing range of different industry and public-sector players.“
Houlin Zhao
ITU Secretary General
Value of MVNOs

In the article, Susan Welsh de Grimaldo, Director of Service Provider Strategies for Global Wireless Practice at Strategy Analytics and James Joiner, senior analyst of service provider and platforms at IHS Markit, give their comments on the benefits of MVNOs.

“It’s a way to open up networks to have other providers come in and offer services,” says Susan Welsh de Grimaldo. “One of the trends we’ve seen is for regulators to open up the market to more competition to potentially encourage price competition to benefit consumers.”

“MVNOs can develop service offerings to appeal to specific market segments that are overlooked by MNOs,” says James Joiner. “For instance, ethnic MVNOs such as Lebara play a valuable role in providing low-cost connectivity to consumers who frequently make international calls.”

“It could certainly create more opportunity to extend reach to potential new user segments who might be credit challenged, or offer a particular value-proposition,” says Susan Welsh de Grimaldo. “It might be content that they like to have, it may be affiliation with a retailer brand and loyalty program that offers benefits.”

It also allows MNOs to gain additional return on investment on expenses such as network deployments and builds, as well as provide services in specific areas they don’t necessarily have a value proposition to pursue, such as cloud-based or AI-related services, Welsh de Grimaldo adds.

Overcoming challenges

MVNOs are facing increased competition in many markets, as mobile operators launch sub-brands to directly compete with MVNO offerings. But MVNOs have a unique opportunity to continue to develop and appeal to new user segments, Welsh de Grimaldo says.

“It’s not just the low-cost, prepaid offering, where you can pick up a SIM card at your local retail or corner market, It’s evolved quite a bit and there a lot of opportunities for it to evolve.”
Susan Welsh de Grimaldo
Director of Service Provider Strategies at Strategy Analytics

Moving forward, there are increasing opportunities for MVNOs to focus on new technologies including AI, Big Data, Connected Cars and IoT. They can also pursue new verticals, expand connectivity to emerging markets to connect the unconnected and offer key services to specific users.

“It’s not an easy business. But there is opportunity and appetite from consumers for other brands that provide services.” Welsh de Grimaldo concludes.

The ITU News article: How mobile virtual network operators MVNOs drive value and improve lives is available here

Videos

Video interviews (playlist) from the ITU Telecom World 2018, Rise of the MVNOs: Leveraging MVNOs in an ‘everything connected’ world.

Author: Allan Rasmussen
Managing director at Yozzo. Allan’s expertise includes the development and execution of growth strategies, market insights, trends and opportunities, new business models and strategies
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