Thursday, October 23, 2008

Mobile virtual network operator

A mobile virtual network operator (MVNO) is a company that provides mobile phone service but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service.[1] A company that does have frequency allocation(s) and all the required infrastructure to run an independent mobile network is known simply as a Mobile Network Operator (MNO). MVNOs are roughly equivalent to the "switchless resellers" of the traditional landline telephone market. Switchless resellers buy minutes wholesale from the large long distance companies and retail them to their customers.

An MNO that does not have a frequency spectrum allocation in a particular geographical region may operate as an MVNO in that region. MVNOs can operate using any of the mobile technologies MNOs use, such as Code Division Multiple Access (CDMA), GSM and the Universal Mobile Telecommunications System (UMTS).

The first commercially successful MVNO in the UK 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 MNO vary by market, country and the individual situations of the MNO and MVNO. In general, an MVNO is an entity or company that works independently of the mobile network operator and can set its own pricing structures, subject to the rates agreed with the MNO. Usually, the MVNO does not own any GSM, CDMA or other core mobile network related infrastructure, such as Mobile Switching Centers (MSCs), or a radio access network. Some may own their own Home Location Register, or HLR, which allows more flexibility and ownership of the subscriber's mobile phone number (MSISDN) - in this case, the MVNO appears as a roaming partner to other networks abroad, and as a "network" within its own region. Some MVNOs run their own Billing and Customer Care solutions known as BSS (Business Support Systems). Many use an MVNE.

There is a distinction between MVNOs and service providers. MVNOs refer to mobile operators who are not licensed radio frequency holders and lease radio frequency from MNOs in order to set up their mobile virtual networks. By these virtual networks they act similar as genuine MNOs in the sense that they can have their own SIM-cards which are different from the SIM-cards of the MNOs who lease those frequencies and they can also conclude interconnection agreements with MNOs or MVNOs. Based on their virtual networks they can either provide wholesale services to their retail arms, or sell wholesale services to mobile service providers. By contrast, service providers are companies that purchase wholesale mobile minutes and resell to end-users. Normally they do not have their own SIM-cards that are provided by their hosting MNOs or MVNOs. The services provided by service providers depend on the services of the hosting MNOs or MVNOs. In addition, interconnection of service providers is carried out by their hosting MNOs or MVNOs.

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