What is a MVNOs?
In the world of telecommunications, the term MVNO is becoming increasingly popular, reaching a market share of 40% in some countries. But what exactly does this acronym stand for and what exactly is an MVNO? If you are not an expert in this field, this post is for you!
MVNO, means Mobile Virtual Network Operator
MVNO is an acronym for “Mobile Virtual Network Operator”. Unlike traditional operators (such as Orange, T-Mobile, P4 or Plus), a virtual operator does not have its own network infrastructure. Instead, it rents it from existing structural operators to offer its own telecommunications services under its own brand and with its own offer. This means that an MVNO can provide services such as voice calls, video calls, SMS and MMS, or data transmission without the need to build telecommunications towers or base stations. In some models, also without the need to invest in many expensive elements of telecommunications systems.
How does a mobile virtual network operator work?
MVNO operates on the basis of agreements with structural operators (MNOs), who provide their telecommunications infrastructure in exchange for a wholesale fee. Thanks to this, such an operator can offer its services to customers under its own brand, often with different price offers or additional services. The offers of virtual operators can differ significantly from those offered by infrastructure operators. MNOs (Mobile Network Operators), or structural operators, often direct their offer to the entire market, rarely opting for dedicated offers.
For example, a virtual operator can focus on a specific market segment. Offering cheaper tariff plans, special services for international calls, or unique offers for specific social groups. Very often, you can find dedicated offers for students, seniors, or immigrants.
Why should a end-user choose a virtual operator's offer?
Choosing a virtual operator’s offer instead of a structured operator’s offer can have several benefits for the subscriber:
- Flexibility: Virtual operators often offer more flexible tariff plans. An example would be a subscription, without long-term commitments. This solution can be attractive for people who do not want to be bound by a long-term contract, but want to use a good and attractive offer.
- Better prices: MVNOs often offer competitive prices because they do not have to invest in expensive infrastructure, and only bear the wholesale cost, which is known to them in advance. Thanks to this, they can focus on providing more advantageous offers to customers, and not calculating high margins.
- Unique offers: Many virtual operators specialize in specific services or market segments. Examples include attractive rates for international calls or packages tailored to the needs of a specific customer group.
Myth: MVNOs provide worse services than MNOs
Since MVNOs use another operator’s infrastructure, the quality of connections and network coverage are closely linked to the quality of services provided by that operator. There is a myth among potential customers of virtual operators that in some cases MVNOs may have lower priority in accessing the network compared to the operator’s main customers, which may affect the speed of the internet or the quality of connections. This is completely untrue. According to the applicable regulations, structural operators cannot offer lower quality services to MVNO end users. The exception is when the MVNO deliberately orders lower quality services, e.g. bypassing 5G! We will return to anti-discrimination regulations in the next posts.
Summary
MVNOs are an excellent alternative to traditional mobile operators, often offering cheaper and more flexible options. Virtual operators use the same infrastructure as MNOs, which allows them to provide the same quality of service. For entrepreneurs, MVNOs can be a tool for building competitive advantages, increasing revenue and building brand awareness among customers.
