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Health Energy Environment. YouTube Instagram Adobe. Kickstarter Tumblr Art Club. Film TV Games. Fortnite Game of Thrones Books. MVNOs are smaller companies that avoid hefty startup costs by using an established network. Setting up a wireless network can cost millions to billions of dollars. When you account for spectrum licenses, securing vendors, and the materials and manpower needed for building the necessary infrastructure, starting a wireless company can have lofty barriers of entry.
MVNOs help larger carriers grow their subscribers indirectly and can provide a steady stream of revenue to MNOs while providing a needed service for the consumer.
MVNOs come with their own set of benefits and negatives as does anything in life. For millions of Americans, they are the best wireless option available and can provide plenty of value to those looking to gain a connection to 5G networks:. On the surface, one may wonder why anyone is even using an MNO with those benefits.
Is it the name recognition? Brand loyalty? Additionally in will negotiate with the supplier depending on market conditions at that time and the quality of the produce. Moreover, the supermarket never feels a strange compulsion to invest in orange plantations in order to do so!
The only reason to invest in network infrastructure for the MVNO is if it can increase its margins by doing so. In the MVNO world there is little room for extra costs that are merely "strategic" or do not deliver a tangible increase in returns. I will cover them here so as to understand where the first generation MVNO thought leadership came from, as a foundation for explaining next generation MVNO models and where the thought leadership is today.
The key pitfalls and misconception of these 5 models , that were driven from a network perspective rather than business sustainability perspective, were;. It would describe the sort of level that a "brand" would typically come in at, for example an entertainment company like Disney, a football club or similar, just look for attracting customers based on affinity with their brand.
The product would come in the form of a branded SIM and phone provided by the host operator. The perceived problem with this model is that it was seen as to not be conducive to offering a differentiated product or service. This is true if we lead the product and service from a network perspective, however, there are many ways to differentiate the service with this model, from SIM applications, to 3rd party voice, data and IMS based services and of course content.
In hindsight, these should only ever be considered if either the host network does not have them or excess capacity of the individual element, if you use of them differs tremendously from that of the host MNO, or you can increase return.
It has to be noted however, that the way MNOs provision customers often ties elements of the host networks operator's network, all of which usually attracts a either or both a one-off or an ongoing cost or licence fee, and therefore duplication not only of resource, but of costs. Apart from the cost, duplication of resource and other reasons too many to discuss here why this should not be considered, there is also the issue of licensing; if the MVNO owns everything except the spectrum; is the MNO just sub-letting its mobile licence and spectrum?
It is important to always bear in mind that these 5 models were based on the very first MVNO model alone. The MVNO model has barely scraped the surface of its potential so far as a wholesale model in one of the biggest markets to have arisen since the automotive industry.
As anecdotal evidence; I say this as I remember attending the due diligence of a very innovative MVNO proposal on behalf of a client, only to be confronted by an over-zealous "advisor", barely out of nappies, with my own previous matrix of what an MVNO should be, based on where the model was in its infancy. I was asked to credibly explain why this proposal did not fit into that now outdated matrix, to add to the irony, by somebody whose favourite buzz-words included "out-of-the-box thinking".
Suffice to say this MVNO now has its own matrix model and the "advisor" did not make it through the following round of redundancies. Do not fall into the "Legacy" trap when planning next generation products and services. The MVNO is a business, not a network, and should never be driven by the network. The whole point of wholesale is the resale of excess capacity, to create extra capacity is to completely misunderstand the underlying concepts of Virtual and Wholesale model, and to completely underestimate the complexity, expense and overheads required of running a mobile network.
Those who fall quickest into this trap are existing fixed or other operators. To successfully pull of an MVNO you need to keep costs to a minimum, which means having staff that understand the whole end-to-end process of delivering a mobile service and a call. Mobile is never to be underestimated, and the MVNO requires a very different skill set than managing a fixed network, where you are only generally responsible for part of the end-user process, not all.
Finally, this brings us on to the most important fact of understanding wholesale and the MVNO. The low-cost MVNO does not offer the host operator any value. This is obviously a finite market and one which could fin itself in serious problems if and when the operators engage in a price war. Selling on cost also only acquires a customer with cost as the only value, which paves the way for someone else prepared to offer an even worse service even cheaper, and as Ruskin said, they are his lawful prey.
The person who buys on price alone is this man's lawful prey. Longer Explanation: Mvno and the Brand. A commonly held misconception of the MVNO is that it was all about the brand.
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