Is it Really a Mobile Virtual Network Operator (MVNO)? Practical Tests to Help You Decide

A Mobile Virtual Network Operator (MVNO) is an entity that has a legal agreement with a national licensed mobile network operator (MNO) allowing the entity to contract directly with end users offering those end users mobile airtime service provision. The MVNO offers the proposition to end customers under its own brand, is free to set the tariffs and tariff structures and contracts directly with the end customer.

However there is much debate and confusion around the exact definition of the term MVNO, below are a list of simple tests that will help distinguish whether an entity is an MVNO, Enhanced Service Provider (ESP) or Service Provider (SP).

The term MVNO means different things to different people. Even the term MVNO is disputed, some refer to an MVNO other to an VMNO: * MVNO is an abbreviation for Mobile Virtual Mobile Network * VMNO is an abbreviation for Virtual Mobile Network Operator

The mobile industry has supported Service Providers (SP) extensively since its origins, mainly due to a regulatory model introduced in the UK to foster competition between Racal Telecom (now Vodafone) and British Telecom (now mmO2 o2 Telefonica).

The boundary between the definition of a Service Provider (SP), Enhanced Service Provider (ESP) and MVNO is blurred.

The following are key tests to determine if an entity is an MVNO:

Does the entity own a national GSM or UMTS spectrum licence?

* Yes - then the arrangement is most likely a National Roaming Agreement.

* No - continue.

Is the host MNOs brand significantly visible in the entities go to market proposition?

* Yes - not an MVNO - most likely to be a Service Provider (SP).

* No - could be an MVNO or ESP.

Does the entity set its own go to market proposition and tariff plans?

* No - then the arrangement is most likely a Service Provider (SP) Agreement.

* Yes - could be an MVNO or ESP.

Does the entity integrate with the host MNO, for example: to terminate traffic, or handle call control, or offer specific value added features which require intervention in the core network?

* Yes - most likely that the entity is an MVNO.

* No - could be SP or ESP.

Does the entity receive a share of inbound termination revenues?

* Yes - most likely that the entity is an MVNO.

* No - could be MVNO, SP or ESP.

The following tests are not relevant to determine if an entity is an MVNO: Does the entity own or operate its own billing system? Why? Historically Service Providers (SP) have operated their own billing systems. Some MVNOs rely on the host MNO to provide branded billing services.

Does the entity own a GSM guard band license? Why? Just because an entity owns a GSM guard band license does NOT oblige any MNO to provide a national roaming agreement.

Who owns the customer? Why? A Service Provider (SP) legally owns the relationship with the customer.

Who is responsible for bad debt? Why? A Service Provider (SP) may be legally responsible for default by the customer.

The entity is a licensed GSM operator in another jurisdiction and member of the GSM Association (GSMA)? Why? This fact is not relevant to the national jurisdiction.

More information on this subject and a range of free whitepapers can be found at www.piranpartners.com

(C) Piran Partners LLP 2007. Piran Partners LLP is a leading provider of professional services to the wireless (mobile) telecommunications industry. Based in London, England the company has global reach. +44 (0) 87 087 99 300.

Andrew White is a founder of Piran Partners LLP, a MVNO (Mobile Virtual Network Operator) consultancy based in London, who assist both third parties gain MVNO agreements and also wholesale teams within mobile network operators to better support MVNOs.

Andrew has negotiated over 10 MVNO agreements across Europe in his five years on the front line of the MVNO business. Andrew’s end-user market expertise spans large multinational corporations through to consumer. Andrew has over 20 years experience in the telecoms industry.