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MVNO Tutorial

MVNO - A Definition

Mobile Virtual Network Operator - a company that does not own licensed spectrum, but resells wireless services under their own brand name, using another company's network. MVNOs are becoming a prevalent force in Europe, and are just beginning to emerge in the United States.

An example of an MVNO is Virgin Mobile, who has partnered with One 2 One in the UK, C&W Optus in Australia and Sprint PCS in the US to offer wireless e-commerce and communication services.

Another recently announced venture is Vivendi's Universal Music Mobile (UMM) service. UMM will market voice, SMS and music-based data services to French mobile phone users over the SFR network. Specialty music applications will include previews of new releases, music news, music event invitations and CD purchasing capabilities. Vivendi aims to sell 200,000 UMM subscriptions by the end of 2001 (announced September 2001) and 1 million within 2 years.

Other examples include:

MVNO - Network Operator - Country

• Tele 2 Europe - Sonoton - Denmark
• Cellular 3 - Eircell - Ireland
• Telstra - Vodafone New Zealand - New Zealand
• Energis - Orange - UK

There are also rumors that AOL is considering an MVNO partnership with AT&T Wireless. The two companies have announced a deal to expand the AOL Anywhere wireless initiative and the deal strongly resembles an MVNO structure. Neither company has confirmed this characterization though.

MVNO Services

For now MVNO services have been limited, but analysts from EMC Research have predicted that as wireless services grow, so will the availability of niche MVNO applications. For instance, in the future a cell phone user may be able to subscribe to a network operator plus multiple MVNOs for specific data services over the same phone. One MVNO could provide sports news, another weather and traffic and still another could provide instant messaging capabilities.

In this way, each MVNO and the network operator could focus on their own niche markets and form customized detailed services that would expand their customer reach and brand.

Regulation

So far MVNOs have not been regulated in any country. The ITU has received several requests to study the issue, specifically to provide input on whether government intervention is necessary to allow MVNOs to offer services and applications at a lower price to consumers. This would help to ensure a more efficient use of the spectrum but some incumbent providers argue that the market is already competitive and intervention is not necessary.

Additional sources of information*

Virgin Mobile
Adventis MVNO Primer
Pyramid Research Resource Center
ITU Regulatory treatment of MVNOs

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Page updated 1/24/07
Copyright 4th Wave Inc, 2007