PrepaidMVNO.com receives many request from potential customers wanting to know how to set up an MVNO. So I will expose one of the latest requests, and introduce a Forum which we hope users will use to post their requests so that the MVNA/E & MNO’s may act on them…(its hubris I know, but potentially the Forum may lead to something)
So here is the Email that I received from what looks to be a good Asian Pacific Company;
I am writing to inquire regarding the process of obtaining an MVNO license for France. I would appreciate it if you could provide me with the process and legalities involved.
A Mobile Virtual Network Operator (MVNO) provides mobile services without owning spectrum and usually relies on the Mobile Network Operator’s (MNO) network infrastructure.
1. Check the Country Telecom’s Laws and validate if a Licence must be approved by the Country’sTelecommunication Authority.
In some countries, a licence is required to operate as an MVNO, however in most countries, the company should be registered with the Authority to provide general telecommunication services.
View the following resource on
The emergence of the MVNO, in Western Europe at least, has been influenced as much by what was not regulated as by what was. Because much of the model falls outside the traditional regulatory mandate, it has been possible for those who adopt the model to stretch it rapidly into innovative and unexpected uses.
In Germany, the Benelux, the Nordics and the UK, we have seen a “light touch” from telecommunications regulators who, in the early days, worked in favour of the MVNOs against a not surprisingly resistant MNO community. Paradoxically, the MNOs themselves are now benefitting from the very model they initially resisted, both through the opportunities to sell pure bandwidth and through the ways in which they themselves can establish and benefit from MVNO brands.
Although the telecommunications regulators in Western Europe helped establish a scenario in which the MVNO model could flourish, companies operating as MVNOs are by no means outside the normal laws of business. Their answerability in terms of consumer protection, for example, is strict – the recent intervention of OfCom in the UK in the case of Talk Talk is a good example. Ofcom were swift to act when customers were pursued for the payment of bills they had not received following the Talk Talk purchase of Tiscali.
As the MVNO model becomes central to the international expansion strategies of MNOs, however, it is what happens on the international and global regulatory stage which will influence pace and direction.
In Greece, for example, the local regulators do not yet allow MVNOs. In the short term, this gives local MNOs some degree of protection, but it is likely, that as the wider economic benefits of a more open model become more apparent, this will change.
In other markets, such as Turkey, Israel and Brazil, regulators have opened the market for MVNOs but in some cases under greater regulatory restriction than we have seen in Western Europe.
In all areas of business and commerce, we see regulatory activity needing to respond to accelerated changes in market behaviour. This is driven by the two classic forces of our age – globalisation and technology. With the MVNO it is no different. While it is essential to understand the regulatory landscape in all markets in which you seek to do business, and we believe that a rapid inclusion of MVNO models in pretty much all geographies over the next three-five years.
This expectation is based on two observations:
1. There are now enough examples showing how models which decouple service from network ownership create wealth, expand entrepreneurial opportunity, and provide greater range and choice of consumer services.
2. The ubiquity of IP networks (a “cloud for everything”) coupled with public expectations of “any time, any device, any location” access make MVNO the only immediately obvious model for service development and sustainability.
If you think that your company can’t launch its own MVNO because there is no MVNO regulation in your country, then you are probably wrong. In most countries, MVNOs are not regulated and the MVNOs legal status is usually provided through the MVNA/E or the MNO.
It is important to note that the regulation framework is not a barrier for an MVNO, it doesn’t mean that regulation bodies have no role in the promotion of MVNO agreements. One of the critical missions of Telecom Authorities is the promotion of the competition and MVNOs are a good way to fulfill the objective. Nevertheless, most Telecom Authorities are reluctant to intervene directly for fear of possible market distortions that could result from a mobile wholesale regulation. They prefer to adopt an indirect way to promote MVNOs.
So, what do you really need to launch your MVNO?
- A strong business plan, which will depend on your main assets (customer base, value proposition, brand, distribution channel…)
- A good agreement with a Host Network Operator (HNO), critical to sustain the viability of your business plan
- Likely, an authorization to provide mobile services (service provider agreement). In many countries, you can obtain it through merely a notification to the Telecommunication Authority.
- Some resources: mobile numbers (MSISDN), IMSI blocks… These resources may be obtained from the Telecommunication Authority as a consequence of your service provider status or from the HNO, as part of your agreement.
Good planning is essential for an MVNO or MVNE. Effective planning is built on a solid understanding of the commercial or consumer mobile telecommunications market and is essential to determine both the service offering and the appropriate operating model.
Planning the service offering
- Definition of the target market
- Selection of appropriate services and service charges for the target market
- Ensuring, for an existing brand, that the products and services reflect the brand’s core values
While service offering goes a long way towards determining the appropriate MVNO model and the required investment in infrastructure, the level of knowledge and experience within the telecommunications industry must also be considered. Issues such as service delivery and Quality of Service, assurance, interconnection management, number portability management and regulatory requirements help to determine how much of the Full MVNO model should be adopted. While these issues need to be considered by a prospective MVNO they are clearly fundamental for an MVNE.
At the end of this process the business should know what to offer customers and the infrastructure that is needed. In addition, it is prudent to make a decision about how the infrastructure will be managed, entirely in-house, in-house but using a managed service, out-sourced but owned by the business, or purchased as a service from an MVNE.
Once the business plan has been validated and the go-ahead approved, the supporting business and technology systems can be designed and the detailed implementation can be created.
The business infrastructure that any MVNO or MVNE will need to design includes:
- Host MNO selection – A host MNO must be located and contracts drawn up to cover commercial and technical aspects. Ongoing management of this relationship is vital.
- Core business systems – As well as standard accounting and operational business systems, an MVNO or MVNE will need to manage customer facing logistics, including retail outlets, handset provision and servicing, management of the customer lifecycle, and the marketing of new services and offerings.
- Value added services – A service-focused MVNO will need to select service platforms and end-to-end solutions for creating a differentiated portfolio of end-user services. A Services portfolio may consist of SMS and MMS services, as well as richer communications services such as Push-to-talk Over Cellular (PoC) / push-to-X, Instant Messaging, Email, Mobile Blogging, Location Based Services, Mobile TV, Streaming video, Presence and more.
- Content services – Where end- user services involve content delivery, sources for this content and download platforms must be found. This may involve engineering existing content for mobile, sourcing existing content from a developer or content aggregator, or locating a developer or designer to create bespoke content. It may also include systems to manage downloads and billing.
- Mobile phones – Suppliers of mobile phones will need to be found, either direct from the manufacturer or using an established distributor.
The technical infrastructure must be identified, including:
- Core network systems
- Service delivery platforms
- Customer relationship management Systems (CRM)
- Billing systems
- Customer care systems
- Network management
These systems must be interfaced with the host MNOs infrastructure, other networks and service operators, as well as common support systems, such as a number portability platform, legal interception, interconnection with other networks and Roaming arrangements.
Once the business and technical infrastructure has been defined, an implementation plan can be devised and executed. The critical activities will include:
- Service specification and testing
- Interface development and testing
- Hardware and software procurement and installation
- Hardware and software integration
- System, integration, interoperability, interconnection and performance testing
- Data conversion from existing systems
- Delivery system content population
- Live deployment and switch-over
Production support includes day-to- day operational activities such as:
- Hardware maintenance, including both physical maintenance and repair, as well as firmware and software maintenance
- Performance monitoring,to ensure that the appropriate quality of service is being provided
- Load balancing and other activities to maintain quality of service and optimize use of the infrastructure
In addition, processes and procedures are required to monitor marketplace performance to ensure existing services remain competitive and new ones are developed. These activities might include:
- Competitive analysis, maintaining intelligence on market competitors
- New technology analysis, maintaining intelligence on emerging technologies
- New content acquisition, maintaining a fresh catalog for content based services
- New services definition and deployment, identifying and implementing new services for the target market
- Service retirement, retiring old services and ensuring customer migration to new services
2. Contact the potential host MNO’s and/or MVNA/E for your Respective Country
Many MNOs believe that there is merit in operating a wholesale MVNO business unit, to compliment their retail model. And have therefore either openly embraced potential MVNO partners or indeed endeavored to launch their own branded MVNOs, presenting a far more favorable environment for a potential MVNO. To view a list of MNO, please use the following link.
Assuming that you have a good business plan, and understand the classification or type of MVNO you want to launch, and have the necessary funding then the next step would be to make contact with the respective companies.
Resource; Piran Partners Mobilise Your Brand –
Dont approach mobile operators (wireless carriers) until the story and strategy stands up from all angles and can be clear communicated.
Tip 2: Be Realistic
Be realistic with both revenue projections and timeline expectations. Clearly over optimistic business plans with little substance are of little interest to mobile operators. Large mobile operators are large corporations, by their nature they move more slowly than entrepreneurial organisations be aware of this.
Tip 3: Be conscious of the mobile operators hidden hurdles
Warning: Hidden icebergs waiting to sink your pitch
When you present to a mobile operator your pitch needs to skilfully avoid the hidden icebergs whilst relating to the mobile operators current hot topics. Your view of whats most compelling may differ radically from that of a mobile operator. More information is available from Piran Partners
Tip 4: Ensure that everything is consistent
Your presentation will undoubtedly lead to follow-up questions, its too late at this point to discover that the forecasts you presented are wildly inaccurate or unrealistically over optimistic. Your credibility has now been damaged, possibly beyond repair. This article is an extract from Piran Partners whitepaper available here.(pdf)
Tip 5: It takes longer than expected
In our experience the time from initial engagement with mobile operators to service launch typically ranges from 9 to 18 months. International copyright owned and retained by Piran Partners LLP.
(c) Piran Partners LLP.
Once contact has been made with the respective departments, the potential customer will have to adhere to the MNOs guidelines and requirements, which can be expensive and technically challenging.
For the MNO, they want to ensure that the potential customer has (a) a solid business plan, with either an existing customers base/brand, or a solid road-map for customer acquisition, (b) suitable funding, as roughly 40% of MVNOs fail within the first two years, (c) technical infrastructure for the classification or type of MVNO as depending on the agreement, the Host MNOs may require certain technical requirements which the customers should have. These typically are associated with maintaining core network and service platforms, as well as have its own International Mobile Subscriber Identity (IMSI) codes, Subscriber Identity Module (SIM) cards, numbering space and interconnection rights and responsibilities.
Press Image(s) to Zoom.
In order to filter out leads, and due to the Nature of the Technical Requirements and Finance Required to setup an MVNO, the MNOs may direct the customer to a Mobile Virtual Network Enabler
Dealing with an MVNE, is limited in some respects, but at a fraction of the
It is worth taking just a moment to look at cost as part of the original MVNO commercial logic. The original relationship between the MNO and independent MVNO was underpinned by the understanding that “10% of something is better than 100% of nothing.” It worked like this:
- MVNOs carry the cost of customer acquisition and management.
- By eliminating these customer acquisition and management costs, selling only network capacity to MVNOs became a new and profitable wholesale business for telcos.
- MVNO profits were determined by their ability to reduce acquisition and management costs – usually through internet-based customer interaction – while keeping “offer” pricing compelling for target clients.
The FUNDAMENTAL SHIFT
This model broke the rules. Most importantly it allowed MNOs to question their own core business. Where previously, ownership of the network was seen as something to be fiercely guarded, the new model acknowledged that opening up the ways in which the network could be put to use by third parties could lead to completely new streams of revenue.
With an initially unexpected twist, it quickly turned into poker. Recognising that MVNOs could achieve direct reach into niche markets which had remained elusive, MNOs themselves established MVNO brands as a means of moving more freely amongst, for example, youth markets.
Put all this together, and we arrive at a fundamental and disruptive shift, which brings us to the “point of transformation”.
Seen initially as a disruptive threat to telecommunications companies, the MVNO model is now a means to increase market opportunity in a climate in which both consumer and enterprise customers display an insatiable appetite for digital communications services. Nested within the disruptive threat of the MVNO model, all players also need to manage a new wave of disruption from pure IP players, such as Skype.
This has three significant implications for the MNO and MVNO:
- Mobile access capacity becomes as asset which can be traded profitably independently of the services for which it is used.
- Both passive and active network-sharing (on a national and international scale) will further reduce the cost of the core infrastructure.
- Core savings can be increased further as network operation and maintenance are offloaded to specialist providers.
Driving cost out of the model results in both challenges and opportunities. Those MVNOs that built their business on offering the cheapest rates will find it increasingly tough to generate the volumes needed
to generate sustainable profit. As cost ceases to be a differentiator, MNOs and MVNOs need to change their proposition. This shift can be either incremental or transformational:
- INCREMENTAL – leading on “cost + value” – not just the cheap rate, but the rate with added service value. Examples include bundled internet or “family and friends” options.
- TRANSFORMATIONAL – leading with value, but ensuring that acceptable cost limits are not exceeded. Examples include full media-rich communications packages, with the latest device wrapped into the service. Virgin Media express this clearly in their own proposition – “choice, innovation, value-for-money” (cost remains important, but it is not in the lead).
With the MVNO model in place, and with the ability to compete on cost alone getting to the end of its market life, the actual differences between MNO and MVNO also become less distinct.
In France, the Main MVNE companies are, Transatel, or Sisteer, however there are others such as Effortel, Elephant Talk Communications or Aspider Solutions who are also MVNEs.
To View a current list of MVNE, please use the following Resource.
Once the customer has chosen its MVNE, or MNO and has negotiated its contract it can now focus on the commercialisation of the program.
- negotiate an exceptional win-win airtime deal
- establish unique brand positioning
- keep acquisition costs low, through distribution innovations
- select world-class partners
- know your target segment intimately
- avoid high initial outlay on assets
- develop a deep understanding of wireless economics
- create sustainable, un-replicable differentiation
- maintain a clear roadmap to convergence
- select from global best practices.
Next week we will expose Part II of Setting up an MVNO which will cover; Packaging, Distribution, Fulfilment and logistics, Device and Category management, eCommerce web portal, Customer contact services, Marketing support and Content
NSN – MVNO
Comarch – How to become an MVNO or MVNE
Atos Origins MVNO
Ovum Consulting – MVN
MVNO Critical Success Factors
MVNO Business Creating a-Win-Win-Model
OFCOM: Setting up an MVNO (Mobile Virtual Network Operator)
Image Credit; © Nokia Siemens Network/ Blueslice Networks Inc.