The document discusses mobile virtual network operators (MVNOs) and provides an overview of the MVNO business model and regulatory environment in Brazil. It describes the key players in an MVNO value chain, including the MVNO, mobile network operator (MNO), and mobile virtual network enabler (MVNE). It also analyzes factors for MVNO success, international benchmarks, and aspects of integration between MVNOs and MNOs/MVNEs.

1. Rio Info 2010 Operadora Móvel Virtual (MVNO) Um Novo Negócio de Telecomunicações Eduardo Prado, Brasilecia Soluções em Tecnologia 02 de setembro de 2010

2. Sumário MVNO: General Overview Regulação da ANATEL Fatores Críticos de Sucesso Proposição de Valor Benchmark Internacional Aspectos de Integração

3. 01 MVNO: General Overview

4. MVNO: Principais Players MVNO = Mobile Virtual Network Operator MVNO é uma companhia que fornece o serviço de telefonia móvel mas não possui uma licença própria de alocação de espectro de freqüência. MNO = Mobile Network Operator MNO é a operadora convencional de telefonia móvel (ou incumbente ) que fornece a alocação de espectro de freqüência para viabilizar a operação de uma MVNO. MVNE = Mobile Virtual Network Enabler MVNE é a empresa que auxilia a MVNO proporcionando a ela uma plataforma rápida e competitiva comercialmente, minimizando os dispêndios de capital antecipados, e a necessidade de uma grande expertise em telecom, habilitando as organizações de marketing e vendas da MVNO para focar na aquisição do cliente e na redução dos riscos dos investimentos. MVNA = Mobile Virtual Network Aggregator MVNA = MVNE + Capacidade de Atacado de voz de dados através de Contratos competitivos com as MNOs

5. MVNO Value Chain (Example 2)

6. MVNO Types & Functionalities – Ex. 2 Dealer Branded Sales Partner Classic Service Provider (SP) Enhanced Service Provide (ESP) Network Service Provider (NSP) Mobile Virtual Network Operator Mobile Network Operator DEALER BRANDED SKINNY MVNO THIN MVNO THICK MVNO FULL MVNO MNO Radio Network (Spectrum license) MNO MNO MNO MNO MNO MNO MNO Number Ranges (IMSI, MSISDN) with distinct MNC MNO MNO MNO (Numbering range use to be assigned to MVNO) MNO (Numbering range used to be assigned to MVNO) MVNO has distinct numbering range and might have distinct MNC MVNO has distinct MNC and Numbering range MNO Core Network (MSC, IN, HLR) MNO MNO MNO MNO MVNO can own some of core elements MVNO MNO Service Platfoms (SGSN, GGSN, SMS-C, MMS-C, etc..) MNO MNO MNO MVNO can own some of Services Platform MVNO MVNO MNO Billing MNO MNO MVNO MVNO MVNO MVNO MNO Customer Care MNO MNO MVNO MVNO MVNO MVNO MNO

7. MVNO Types & Functionalities – Ex.2 Dealer Branded Sales Partner Classic Service Provider (SP) Enhanced Service Provide (ESP) Network Service Provider (NSP) Mobile Virtual Network Operator Mobile Network Operator DEALER BRANDED SKINNY MVNO THIN MVNO THICK MVNO FULL MVNO MNO Tariff MNO MVNO can negotiate different tariffs with MNO MVNO MVNO MVNO MVNO MNO Custom SIM MNO Can be powered by MNO MVNO can issue own SIM MVNO can issue own SIM MVNO MVNO MNO SIM Branding MNO Issue own brand powered by MNO. Can be co-branded MVNO MVNO MVNO MVNO MNO Branding and Advertising MNO MVNO MVNO MVNO MVNO MVNO MNO Distribution MVNO Can also be sold by MNO MV NO MVNO MVNO MVNO MNO Customer Ownership MNO MNO MVNO but hosted by MNO MVNO but hosted by MNO MVNO MVNO MNO

8. MVNO: Examples

9. MVNO: Architecture Example GMSC MSC HLR AuC VLR EIR BSC GMSC HLR MNO Full MVNO Radio Access Network (RAN) SGSN GGSN IN IN GGSN SMS-C SMS-C AuC EIR MSC VLR BSC Radio Access Network (RAN) PSTN SS7 MNP MNP

10. EUA = destacam-se telSPACE e Telcordia Europa = destacam-se Effortel (Bélgica), Transatel Solutions (França), Aspider Solutions (Holanda), vistream (do grupo Materna) (Alemanha) e Elephant Talk (Holanda) Um fato merece ser destaque sobre a Effortel : esta empresa faz o papel do MVNE para 4 das 7 MVNOs do Carrefour no mundo: Carrefour (na Bélgica com a Orange como MNO); Uno Mobile (na Itália com a Vodafone Italy como MNO); Carrefour Mova (na Polônia com a Polkomtel como MNO); e Carrefour Taiwan (em Taiwan com a Chunghwa como MNO). Os outros países onde o Carrefour tem MVNO são: França ( Carrefour ), Espanha ( Carrefour Móvil ) e Grécia (neste país a MNO Vodafone Greece é a proprietária da MVNO do Carrefour). Conheça mais sobre a plataforma deste MVNE aqui: Wikipedia Effortel . MVNE Examples

11. 02 Regulação ANATEL

12. A ANATEL lançou a Consulta Pública no 50 em Dezembro de 2009; As Contribuições Públicas foram fechadas em 05.ABR.2010 (364 contribuições); O Conslheiro Relator (Emília Ribeiro) foi escolhido em 01.SET.2010; A Resolução final deve sair até 30.OUT.2010 (Tem fé Tomé!) ANATEL: Passos & Players de MVNO Credenciado Autorizada Representante Comercial Empresa Móvel de Telecom O cliente final é da MNO O cliente final é da MVNO Responsabilidade solidária com MNO Responsabilidade individual da MVNO A MNO é responsável pelos prefixos de numeração A MVNO é responsável pelos prefixos de numeração Emite conta telefônica juntamente com MVNO Emite conta telefônica sozinha A MNO é responsável pelos contratos de ITX e Roaming A MVNO é responsável pelos contratos de ITX e Roaming

13. 03 Fatores Críticos Sucesso

14. Critical Success Factors Launch Risks & Entry Barries

15. 04 Proposição de Valor

16. Value Proposition After a good business model, the MVNO needs …. An appealing value proposition that is going to attract and have customers holding on to unique services or products …. Customer care Product and services Handset packages Pricing Brand Distribution

17. Value Proposition

18. 05 Benchmark Internacional

19. MVNO: Market Overview Operational Cost Focus Only SIM Card (Voice & SMS) Handsets & Roaming Customer Ownership Focus Large Retailers Specialist Retailers Community Reach Focus Sports Ethnic & SIG (Special Interest) Groups Students & Youth Groups Content & Brands Focus Media & Entertainment Established Brands Convergence Focus Business & Consumer Focus Business Focus

20. MVNO: Top 10 Worldwide Market Country Regulatory Position # MVNOs per Mobile Operator # MVNE per MVNO Operator Comments Germany 59 MVNOs = Vodafone (15); E-Plus (18); O2 (7); T-Mobile (19) 02 MVNEs = Vistream (7); Moconta (3) There is no legal basis for mandatory access to mobile operators’ networks for MVNO. They currently have to find solutions through commercial negotiation. Netherlands 56 MVNOs = T-Mobile (6); Vodafone (10); KPN (40) 04 MVNEs = Teleena (4); Telfort (2); Aspider (3); Debitel MVNE (3); Elephant Talk Communications (3) Although no official arrangements for MVNOs are in place, the government has determined that access should be granted on a reasonable cost basis with regard to interconnection. USA 54 MVNOs = AT&T Wireless (17); Nextel (2); Sprint (23); T-Mobile (1); Verizon Wireless (11) 05 MVNEs = Ztar Mobile (2), Credo Mobile, telSPACE (3), Telispire (2) and Telcordia (4) The government has refrained from regulating operators with regard to MVNOs. Mobile network operators have no obligations to carry traffic for MVNOs, nor are they restricted or limited in their ability to do so. Belgium Facilitate Launch of MVNOs 48 MVNOs = Base (39); Mobistar (5); Proximus (4) 02 MVNEs = Transatel Solutions (4) and United Telecom (1) United Kingdom (UK) Facilitate Launch of MVNOs 40 MVNOs = 3 (2); O2 (7); Orange (9); T-Mobile (10); Vodafone (12) 02 MVNEs = Gamma Telecom and Mfonex The government has given free rein to operators with regard to MVNOs. Mobile network operators have no obligations to carry traffic for MVNOs.

21. MVNO: Top 10 Worldwide Market Country Regulatory Position # MVNOs per Mobile Operator # MVNE per MVNO Operator Comments France Facilitate Launch of MVNOs 33 MVNOs = Bouygues Telecom (9); Completel (1); Orange (11); SFR (11); Vodafone (1) 02 MVNEs = Transatel Solutions (4) and Comarch (1) The French operators have succeeded in preserving their dominance by signing up MVNOs on their own terms. Reasons for bad MVNO market share: (1) complex number portability arrangements, and (2) lengthy subscriber contracts which discourage churn. Australia Facilitate Launch of MVNOs 28 MVNOs = Vodafone Hutchison (7); Optus (14); Telstra (7) 02 MVNEs = Virtel Group (2) and Commoditel (5) Some regulatory differentials: Mandatory sharing of networks enforced on operators with significant market power Wholesale pricing on a cost-plus basis with regulated margins Norway Force MNOs to Share Network 14 MVNOs = Telenor (6); NetCom (8) 01 MVNE = Spinbox (1) After much debate, in 2003, the regulators imposed an obligation on MNOs to provide access to MVNOs. Denmark Facilitate Launch of MVNOs 13 MVNOs = CBB Mobile (1); Sonofon (1); TDC Mobil (9); Telia Mobil (2) Denmark serves as a unique example of MVNO-related regulation because it introduced mandatory wholesale access in 2000 and annulled the policy six years later as the new regulatory directives by the EU no longer supported the finding of collective dominance. Hong Kong (included here because the MVNO Regulation) Force MNOs to Share Network At least 05 MVNOs = 1528 Smart, China Unicom, CITIC 1616, China Motion Telecom Mobile and Telecom Digital Mobile Some regulatory differentials: 40% of network capacity should be dedicated to MVNOs No limit on the number of MVNO licenses Uniform wholesale pricing regardless of scale of MVNO

22. MVNO: Some Examples

23. MVNO: Some Examples

24. MVNOs: Know How of América Móvil MVNO MNO MVNE Launch & Group Services Tracfone Wireless (USA) AT&T Wireless América Móvil Mobile Services: Voice, Pre-pay, SMS and International Roaming Focus: Latin American market Tracfone has 10 millions of subscribers

25. 06 Aspectos de Integração

26. Níveis de Integração com um MVNE Torres Nível de Integração # 1 – Network Level Signaling & voice for triggering the IN to manage the call control # 2 – Provisioning Level Interface for submitting command to HLR (SIM activation, SIM deactivation, Mobile Number Portability, change MSISDN, SIM Swap …) # 3 - Mediation Level Interface for exchange of CDR’s, especially in case basic services can’t be controlled in real-time (ex: sometimes the case for SMS in Roaming) and for MNO to provide Wholesales CDR’s # 4 – SMS Interface SMS Bulk interface for sending bulk SMS to MVNO’s customer database like Marketing campaigns, voice mail notifications, top-up notifications …

27. OSS/BSS – Effortel (Belgium)

28. Muito Obrigado … !!!

29. Contato Eduardo Prado Consultor de Mobilidade e Novos Negócios (11) 7626 0577 E-mail: [email_address]