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4 Ways MVNOs are Changing the Face of Telecom Industry

September 22, 2022 / Blog / posted by Aayush Barot

The communications industry is mainly driven by technological progress, whether AI-first VoIP services or MVNOs (Mobile Virtual Network Operators), enabling a hyper-connected digital world. The enhanced IoT ecosystem, 5G technology, and machine-to-machine systems present new opportunities for MVNOs, especially outside megalopolises where traditional operators couldn’t reach.

Evolving business models allow a wide range of industries and new players to enter the MVNO ecosystem without being part of the telecom industry. For example, automotive and logistics industries are collaborating with MVNOs to offer direct-to-customer communication services for connected autonomous vehicles.

Unlike traditional operators that mainly focus on B2C offerings, emerging MVNOs capitalize on enterprise expectations of customized and real-time seamless connectivity. The increasing penetration of 5G services and growing enterprise subscribers are expected to drive the growth of the MVNO industry value from $65 billion in 2020 to $125 billion by 2027.

Let’s understand what sets MVNOs apart from other operators and what they imply for telecom’s future.

What Is a Mobile Virtual Network Operator?

Mobile virtual network operators are alternative wireless service providers that effectively gain bulk access to network capacity and connectivity from major MNOs at discounted or wholesale rates. Then, they use this leased infrastructure to resell services to a niche user base along with specific value-added features, products, and unique content.

It enables MVNOs to offer affordable retail and wholesale voice, data, A2P marketing, and other services in more targeted ways by integrating advanced and unique connectivity products. Whenever an opportunity arises, the MVNO model allows any organization, from start-ups to large established retailers, to buy network services and deliver new mobile functionalities that serve specific segments.

What Differentiates MVNOs from Other Operators?

There are four types of MVNOs: branded reseller, service provider, light MVNO, and full MVNO. However, they share a standard set of characteristics that sets them apart from other operators:

Have access to the existing consumer base
A niche user base makes it easier to sell white-labeled mobile network products and services
Have ready access to resources for front-end systems like sales, marketing, and customer support
Drives growth by serving untapped market segments
Innovative value propositions and advanced services
Intensifies competition and reduces entry barriers for new players to avoid oligopolies
Provides a more excellent choice of service providers and services at a decreased price

How Are MVNOs Revolutionizing the Telecom Industry?

Addressing the Needs of Specific Market Segments

MVNOs bring mobile services to diverse populations by addressing the needs of specific market segments. They narrow down the focus on previously untapped customer segments, such as youth, military, expatriates, migrants, comorbid patents, etc. MVNOs act as sub-brands for host operator networks by adding these segments to their existing subscriber base.

These customer segments are already part of specific retail networks, which gives MVNOs easy and cheap access to strong distribution channels and marketing plans. For example, MVNOs can collaborate with used and refurbished handset markets to make highly featured devices and previous-generation flagship phones accessible to lower-income users through retail networks.

Embracing Innovative Value Proposition with Advanced Services

MVNOs are creating differentiated value propositions by shifting from wholesale voice and text services to integrated offerings related to the parent company’s or group’s products, such as financial services, loyalty programs, gaming, and cloud platform.

The MVNO model enables the convergence of fixed, mobile, and content services. It provides cable companies and broadband operators a faster and cheaper entry into the mobile market, with lower churn rates being an extra benefit.

The industry-specific MVNOs will explore opportunities to bundle out-of-the-box connectivity with devices in the hyper-connected world, like medical devices, wearables, industrial equipment, vehicles, etc.

Striving for Operational Excellence

MVNOs will have an option to select the most suitable enablers to assist them with critical operations, like administration and billing. Besides, they can determine which services to keep in-house and which to outsource from the host operator.

MVNO’s cost structure comprises variable charges like customer acquisition expenses and wholesale airtime costs, leading to extreme control over variable costs. Simultaneously, they limit fixed outlay costs as and when needed. With reduced costs and in-house assets, this business model helps MVNOs achieve operational excellence.

Seizing Opportunities Presented by Latest Technology Enablers

5G: Increasing 5G deployments enables a new breed of MVNOs through network slicing. They will target industrial verticals having special connectivity needs with bundled solutions. For example, 5G-driven MVNOs can help small production units to tap into the power of AI, the Internet of Things, and cloud services.

e-SIM: Electronic subscriber identity modules (e-SIMs) will avail out-of-the-box connectivity to all users. It will make it more accessible than ever for consumers to buy connectivity plans whenever they need them, on the go. For example, a subscriber can buy an e-SIM exclusively arranged for travelers that can save up to 90% on roaming costs compared to the traditional carrier.

Network Function Virtualization (NFV): NFV, along with SDN (Software Defined Network), enables faster time to market for innovative services. It also brings the capability to manage wholesale data costs better. They can do so by implementing traffic shaping on the host network’s virtualized packet gateway.

IoT: MVNOs work closely with IoT systems and technologies to support a secure global connectivity footprint. In addition, IoT-centric MVNOs will address global environmental and climate issues by enabling connected and intelligent cities with improved agriculture, transportation, and healthcare.

Offer a Range of Innovative, Convergent Services with Our Exclusive Network Arrangement

The MVNO model and its potential have attracted many leading companies worldwide. Telecom players like cable companies, fixed broadband operators, and retailers are moving into the MVNO space to increase their share of wallets through convergence. Non-telecom players are increasingly capitalizing on new opportunities to serve customers with segment-focused and innovative offerings backed by the latest technologies. Considering its benefits, like operational efficiency and minimum upfront costs, the focus shift to MVNO is no longer the question of if but when.

Bankai Group has exclusive traffic arrangements with MNOs, MVNOs, and enterprise customers to provide the highest quality of wholesale and retail voice, and multi-service level offerings.

Aayush Barot

Aayush hails from Mumbai and is now based out of New York. He completed his Bachelors in Business from Jai Hind College Mumbai and has earned various accolades as an independent professional for Business and Marketing. He is an ardent fan of his business and considers work as a way of relaxation. Today he is the Chief Business Management Officer at Bankai Group, where he started as a Sales Executive, 11 years ago. Aayush comes from a Hospitality Business Family but chose to do something entirely different into Telecommunications. He handles Voice and Services portfolio for Bankai Group and has steered the growth of business by almost 40% year on year. Under his leadership, the Voice Vertical grew from $50 million/year to $340 million/year from 2005 to 2015. You can reach him at [email protected].