Introduction to MVNO

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Introduction to MVNO

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Introduction to MVNO

  1. 1. Introduction to MVNO Private & Confidential property of Shilpin Pvt. Ltd. www.shilpin.in
  2. 2. MVNO  Index o o o o o o o o Concept Definition Formation of MVNO MVNO and other Players in Market Types of MVNO Generic Model of MVNO Opportunities and Risks Case study : - ESPN mobile - Virgin mobile India
  3. 3. Concept • Mobile Virtual Network Operators: Introducing the business concept of "One doesn’t need to own a cow to milk a cow” What is an MVNO?  An MVNO does not own spectrum, it leases it from a network operator with whom it has a relationship  An MVNO supplies the SIM card and has full control over its subscribers and handles its own billing  An MVNO buys network capacity, usually as close to the base level as possible, and invests in a service infrastructure of its own  The MVNO thereby establishes a more independent position and is able to compete directly with other mobile network operators in the market by offering advanced services
  4. 4. Definition US Federal Communications Commission Resellers offering service to consumers by purchasing airtime at wholesale rates from facilities-based providers and reselling it at retail prices European Commission A mobile operator, which does not have a license to use radio spectrum, but has access to the radio infrastructure of one or more mobile operators and is able to offer services to customers using that infrastructure and its own network Industry Analysts An arrangement where a network operator acts as a wholesaler of airtime to another firm, which then markets itself to users just like an independent operator with its own network infrastructure Study Definition: Companies that buy network capacity from at least one mobile network operator in order to offer their own branded mobile subscriptions and value-added services
  5. 5. Formation of MVNO  An MNO does not have the content and applications to succeed in a wide variety of services.
  6. 6. Formation of MVNO contd…
  7. 7. MVNO and Other Players in Market  Different Players: – MNO – MVNO – Service Provider – Reseller Y N Service Available Service Not Available Service MNO MVNO Service Provider Reseller License and Infrastructure Y N N N Customer Base Y Y Y Y Customer Services Y Y Y N Y Y Y N Roaming Agreement Y Y N N Routing Mechanism Y Y N N Instrument/ Sim Y Y Y N Customer Billing
  8. 8. Types of MVNO:  Various MVNOs network and operational components: AUS Base stations and transceiver equipment that provides access to spectrum All network elements apart from the access network, including switching and transmission, home location registers (HLRs), intelligent network platform, etc. Full MVNO Enhanced MVNO Basic MVNO UK Access Network Core Network All activities and equipment aimed at the design and provision of services. Service Platform All activities and equipment that are required to design and implement the pricing policy and billing options. Pricing and Billing Activities relating to after-sale customer care Customer Care Marketing, sales and customer acquisition activities Marketing Sales
  9. 9. Generic Model of MVNO
  10. 10. Opportunities  Participating in mobile boom  Differentiate and expand own services  Covering a niche which MNOs do not serve  Developing a sustained customer relationship  Distribution of own content  Cross selling to existing customer base  Leveraging own distribution network  Leveraging existing strong brand
  11. 11. Risks  MVNO introduces additional competition into the market.  Network quality level cannot be controlled  High customer acquisition cost if no brand and distribution available  Network operators will prioritize their own subscribers above those of an MVNO if bandwidth is a limiting factor, this could lead to non-renewal of an MVNO agreement in order to recoup the network capacity
  12. 12. ESPN Mobile • Launched in February 2006, • Parent company: Walt Disney Corporation • MNO: Sprint • Offer: Sports information services • Brand value: high • Telecom experience: none • closed in September 2006 • Reasons for closure: insufficient subscriber growth • Main contributors to failure: – – – • High prices of handsets Insufficient service differentiation Technical limitations of video download Re-launched by Verizon in May 2007
  13. 13. ss • On 1st March 2008, Virgin Mobile has entered the Indian Market, Virgin is primarily an MVNO company, and retail distribution is only a part of the overall strategy. MNO: Tata Teleservices. • Brand value: high • Telecom experience: 15 million customers over 4 continent. • Virgin India Strategy : Target Segment - Urban Youth - There are more than 215 million Indians aged between 14 25 years old. Over the next three years, this segment to be adding over 50 million new youth subscribers. - Focus exclusively on a single segment and by continuing to deliver innovative services that cater to this segment's distinct needs. • Sales Objectives : - Revenues of Rs. 35000 Crores by 2011 (including connections, handsets and accessories)
  14. 14. Strengths – Strong Global Brand – Limited overlap with Tata’s existing customers – – – Very low fixed costs as it leases Network Time Not tied to a particular Technology Threats – Lack of number portability - switching barriers – Unclear Government Policy on MVNO – Limited 3G services – Falling Handset prices - lower margins – Non serious image may not go well with conservative Indian consumer.
  15. 15. MVNO Abbreviations  MVNO- Mobile Virtual Network Operator  MNO- Mobile Network Operator  SP- Service Provider  SIM Cards- Subscriber Identity Module Card

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