A Mobile Virtual Network Operator (MVNO) is an organization that provides a mobile (sometimes called wireless or cellular) service to its customers but does not have an allocation of spectrum. It is important to add that a) the organization may own an allocation of spectrum in one region, which would make it a full blown MNO in that region, but operate as an MVNO in another region where it does not own spectrum, b) that this spectrum can be CDMA, GSM, UMTS, etc. and not just GSM, and c) that this refers to public allocation of spectrum, as recently some companies, including MVNOs like British Telecom, have allocations of mobile spectrum for use in private spaces, similar to hotspots, but are still MVNOs (taken with permission from mobilevirtualnetwork.co.uk). The first commercially successful MVNO was Virgin Mobile UK, launched in the United Kingdom in 1999 and now has over 4 million customers in the UK. Its success was replicated in the US, but ventures in Australia have not been so successful, and failed in Singapore, albeit with a different strategy.
An MVNO's roles and relationship to the Mobile Network Operator (MNO) vary by market, country and the individual relationship of the MNO and MVNO. In general an MVNO is an entity or company that works independently of the operator and can set its own pricing structures, subject to the pricing structure agreed with the MNO. Usually, the MVNO does not own any GSM, CDMA or other core mobile network related infrastructure, such as Mobile Switching Center (MSC) or a radio access network. Some may own their own Home Location Register (HLR), which allows more flexibility and ownership of the MSISDN (mobile number), and the MVNO appears as a roaming partner to other networks abroad, and as a "network" within its own region. However MVNOs do tend to own or run their own Billing and Customer Care solutions, referred to as BSS (Business Support Systems).
Link
http://www.mobilevirtualnetwork.co.uk/#whatisanMVNO?MVNOs Classification and Marketing strategies
Discount MVNOs provide cut-price call rates to market segments. Discount MVNOs include Fresh Mobile, MobileWorld and Virgin Mobile. Their strategy is based on cheap prepaid or postpaid pricing plans with basic voice and SMS services.
Lifestyle MVNOs focus on specific niche market demographics. MVNOs such as Helio, Boost Mobile and AMP'D Mobile in the US, and Hello_MTV and ID&T Mobile in Europe market entirely to young users, while Disney Mobile markets their services to families with children.
There are three primary motivations for mobile operators to allow MVNOs on their networks. These are generally:
Segmentation-Driven Strategies – mobile operators often find it difficult to succeed in all customer segments. MVNOs are a way to implement a more specific marketing mix, whether alone or with partners and they can help attack specific, targeted segments.
Network Utilisation-Driven Strategies – Many mobile operators have capacity, product and segment needs – especially in new areas like 3G. An MVNO strategy can generate economies of scale for better network utilisation.
Product-Driven Strategies – MVNOs can help mobile operators target customers with specialised service requirements and get to customer niches that mobile operators cannot get to.
MVNO models mean lower operational costs for mobile operators (billing, sales, customer service, marketing), help fight churn, grow average revenue per user by providing new applications and tariff plans and also can help with difficult issues like how to deal with fixed-mobile convergence by allowing MVNOs to try out more experimental projects and applications. The opportunity for mobile operators to take advantage of MVNOs generally outweighs the competitive threat.
MVNOs in the World
There are currently approximately 360 planned or operational MVNOs world-wide according to consultancy Takashi Mobile working on MVNOs since 1999. Countries like The Netherlands, France, Denmark, United Kingdom, Finland, Belgium, Australia and United States have the most MVNOs and also emerging stabilisation of the MVNO marketplace and some well-known MVNO success stories; whereas some countries are just beginning to launch active MVNO business models - like Portugal, Spain, Italy the Baltics and Austria. Where there are many MVNOs in a single country, it is difficult for new entrants as the overall marketplace is highly saturated.
UPDATE (13th Nov 2006): Blycroft Publishing announced that there are roughly 230 active MVNOs, as of June 2006. The MVNOs contained within their MVNO market study vary from consumer driven MVNOs to enterprise and data focused operations. It is a common misbelief that MVNOs only target the consumer markets. An example of a non-consumer MVNO being Wireless Maingate, an M2M data based MVNO. It is correct that the majority of MVNOs are consumer focused and most have a focus on price sensitivity as their unique selling point. It is now widely thought that the future development of MVNOs as an industry is within enterprise market developments and M2M markets.
MVNO, MVNE and Beyond
The industry is going through stages characterized by alphabet soup nomenclature, including MVNO and MVNE (so-called Mobile Virtual Network Enabler). Most industry observers believe that the market is evolving and that many MVNOs will become operators while others will fold or be bought.
