Streamline: What Technologies Help Telecom Companies and Aggregators Quickly Launch MVNOs

Increasingly, representatives of various industries are contemplating the possibility of launching MVNOs (Mobile Virtual Network Operators) under their own brand. Meanwhile, telecom companies are eager to lease their mobile networks to them. As such, telecom market leaders diversify their business, build up the subscriber base and collect more subscriber data that could be used for added monetization in the future.

MVNE platforms help telecom companies to launch MVNOs by automating most of the processes required for this purpose. MVNO aggregators, which closely cooperate with mobile network operators, are also seeking to take advantage of this profitable opportunity.

How such projects are implemented and what are the benefits for each of the parties, read in this article.

Which Companies are Interested in Launching MVNO?

MVNO is available to any business, from a large bank and Internet service provider to an individual blogger, coffee shop or fitness club. By launching an MVNO, a non-telecom business unlocks new sources of profit, develops its own digital ecosystem, drives revenue growth and increases the customer lifetime (the period when a customer actively uses the product or service).

• The following types of businesses most often launch their own MVNOs:
  
• Banks and other financial organizations.
  
• Retail chains.
  
• Major corporations launching internal communications.
  
• Fan associations: sport, artists, singers and other popular figures.
  
• IT companies with specialized M2M/IoT or other service requiring deep integration with the mobile communication channel (mostly transportation or tracking of employees on site).
  
• Fixed-line and home Internet operators with a business strategy based on the FMC (Fixed Mobile Convergence) model, i.e. providing convergent solutions.
  

For operators following the FMC model, MVNOs can be a significant advantage. Providing customers with cellular communication service via a virtual mobile operator, while not investing in building their own expensive infrastructure, is the best approach given a limited budget and high competition in the market.

The number of MVNOs on the host operator’s network is increasing, which creates a demand for technologies to streamline the process of launching and managing new MVNOs, as well as servicing their numerous subscribers. Virtual operators can either run on the host operator’s leased infrastructure, or on a single instance of the billing system; but it gets more complicated once there is more than one virtual operator. In this case, a specialized MVNE platform provides the technology framework for implementing multiple MVNO projects.

MVNE platform (Mobile Virtual Network Enabler) is a complex IT solution of the BSS class. With it, the host operator (MNO) or aggregator can automate the processes of launching, managing and servicing subscribers of multiple virtual operators on a single platform.

Why Would MNO Develop MVNO?

It is no secret that the cost of attracting a new subscriber, or Customer Acquisition Cost (CAC), into a mobile operator’s network is increasing every year. Today, amid the surplus in the telecommunications market, the CAC in Russia averages between RUB 1,300 and 1,500.

Analysts estimate that the telecommunications market is oversaturated and has reached 156.9 % (active subscribers versus the country’s population).

The MVNO has its own customer base along with various insights into the customers. Based on the available data, MVNO can provide a unique value proposition to its customers, thus relieving the host operator of the cost of subscriber acquisition. Reputational risks for the host operator are almost none, because most often subscribers will not even know which network they actually use, or at least don’t directly associate the negative experience with the host company. That is why sometimes major telecom operators themselves create MVNOs under new brands (sub-brands), as this gives them a certain freedom to test new hypotheses without negative impact on the main brand. In addition, it allows them to better understand and segment their target audience.

Operating as an MVNO aggregator is also an opportunity for business expansion. Similar to a host operator, the company can gain additional profit and expand its technical competencies in working with networks.

How to Launch an MVNO

A telecom operator can develop its MVNO business both independently and with the help of an aggregator company that will assist in building processes, i.e. will search for and launch MVNO projects with multiple host operators. Regardless of the size of the company that announces itself as an MVNO partner and plans to attract a large number of virtual operators, from two to several dozens, it should look into purchasing an MVNE platform. This will prevent the creation of countless billing and servicing systems for subscribers of every single MVNO, and ensure easy management of products, services and billing in a single information system.

The MVNE platform allows the host operator to avoid creating its own billing instances for every MVNO, thereby reducing the total cost of ownership.

According to Bercut, transition from servicing 2 to 6 MVNOs on individual BSS stack to maintaining them on a single MVNE platform can help you reduce TCO by 30–50 % (depending on the MVNO number).

Advantages of the MVNE Platform:

• Servicing all MVNOs under the multitenancy model (on single platform) reduces the timeline and cost of launching and maintaining MVNOs.
  
• Off-the-shelf components within the platform simplify integration with the operator’s network.
  
• An extensive toolkit facilitates automation of the management processes of the platform and the MVNOs, e.g. role model customization, isolation of technological and business processes, customizable parameters and notifications, ready-made products and services (for end subscribers).
  

The key factor that forces host operators to consider purchasing an MVNE platform is the potential negative impact of technological errors and accidents that may occur in the process of setting up a virtual operator. They can affect the host operator’s main BSS solution, putting its core business at risk.

Apparently, an MVNE platform should be considered primarily as a BSS. Therefore, companies should carefully choose a partner and on the basis of its experience not only in launching MVNOs, but also in developing automated systems for telecom in general.

Bercut is a technology partner to companies on their way to digital transformation with more than 28 years of experience. Over these years, the Bercut team has been creating and implementing automated billing systems (OSS/BSS), which today serve more than 300 million subscribers daily. The team has expertise in launching billing and VAS solutions for core (MNO) and MVNO businesses.