Innovation Services

Mobile Virtual Network Operator

Mobile Virtual Network Enabler

Strategy and Marketing

Strategy and Marketing

Whats it all about?

Seemingly saturated markets, increasing competition and higher end-user expectations with regard to
quality-of-service (QoS) and innovation along with
greater sophistication and heterogeneity/diversity in
terms of end-user service and content demand are
the current market challenges facing todays operators.
While experiencing cost pressures, ever-increasing
technological complexity and shortage of skills and
resources, they need to identify new ways of real differentiation and unique value proposition, outperforming
their competitors on time-to-market.
Currently, the telco business paradigm is shifting away
from full vertical integration of the operators value
chain towards a higher degree of specialization. Specialists, turning away from mere coverage and capacity provision and focusing solely on end-user service
development, content, branding, marketing and sales,
are emerging. The latter are often companies with a
strong brand and consumer focus against a media or
content background.

MVNO

The Mobile Virtual Network Operator (MVNO) concept

is a very attractive option for such a specialist,
aiming at drastically reducing the required resources
(investment, headcount and roll-out time) and allowing

the new entrant to focus on the really critical, marketside success factors. As there is no need for a spectrum licence, a lengthy, complex and expensive radio
network roll-out, or ongoing maintenance of the latter,
market entry barriers are much lower than for a full
mobile network operator (MNO).
On the other side of the coin, dependency on external,
potentially competing, parties increases, thus necessitating complex contractual agreements and governance
models. Infrastructure and services suppliers are
working on Mobile Virtual Network Enabler (MVNE) offerings, intended to make optimal use of a host mobile
network operators (host MNOs) spare capacity, while
simultaneously providing sound governance models to
the MVNO.
In our MVNO consulting package, we advise our
clients on the strategic, technical and commercial
implications of the MVNO business model, create all
necessary blueprints, support them in negotiating
fair terms and conditions with a host MNO, as well as
accompanying them through the implementation and
commercial launch. With respect to suppliers, we provide advice on how to successfully implement MVNE
business models.

MNO

Radio
Access

Network
Routing

Interconnection

Applications &
Services

Customer
Care

Billing &
Collection

Handset
Management

Marketing &
Sales

Full
MVNO

Radio
Access

Network
Routing

Interconnection

Applications &
Services

Customer
Care

Billing &
Collection

Handset
Management

Marketing &
Sales

Light
MVNO

Radio
Access

Network
Routing

Interconnection

Applications &
Services

Customer
Care

Billing &
Collection

Handset
Management

Marketing &
Sales

Second
Brand

Radio
Access

Network
Routing

Interconnection

Applications &
Services

Customer
Care

Billing &
Collection

Handset
Management

Marketing &
Sales

Branded
Reseller

Radio
Access

Network
Routing

Interconnection

Applications &
Services

Customer
Care

Billing &
Collection

Handset
Management

Marketing &
Sales

Host MNO value added

Variants of the MVNO business model

MVNO value added

Innovation Services

MVNO Concept
An MVNO provides mobile services to end-users
without owning its own frequency spectrum, a radio
access network (RAN) and backhaul network, as it
buys such capacity from a host MNO. The MVNO may
or may not own core network assets such as home
location register (HLR), mobile switching centre (MSC)
and gateway GPRS support node (GGSN) but its
essential network assets are a service delivery platform
and a business support system (BSS) for customer relationship management (CRM) and billing. The degree
of freedom available to the MVNO to differentiate itself
via innovative services and pricing depends on the
breadth of the core network platform it operates and
the agreements contracted with the host MNO.
Also commonly handled within the MVNO framework
are second brands of incumbent MNOs and branded resellers that resell an MNOs products and services under their own brand and are essentially a specialized marketing and sales channel.
Market maturity and diverse customer needs make the
MVNO a very promising concept. The value of MVNOs
to host-MNOs stems from:
the strength of their brand and marketing;
their innovative sales channels and distribution
network;
their market intelligence contributing towards identifying and serving the fifty to a few hundred customer
segments known to todays sophisticated markets
and their ability to target specific customer segments
at a lower cost than the incumbent MNO.
MVNOs strategically position themselves firstly as either offering differentiated services, bundles, convenience and service excellence or providing no frills
basic voice service as a value proposition and, secondly, as either serving the mass market or a niche market
(e.g. minorities) as their target market.

For an MNO, opening its mobile network to MVNOs

makes sense if:
the MNO subscriber growth is limited due to market saturation, or market share is stale/decreasing;
the MVNO addresses market segments that are
currently underpenetrated by the MNO (or not
addressed at all);
the MVNO succeeds in addressing market segments at lower cost than the MNO;
the MVNO does not compete on low price, but
instead on content or brand;
the MNO churn rate is high, so it is preferred that
customers leave to go to an MVNO partner rather
than another MNO (as the host MNO would still
carry the traffic);
a large amount of capacity is available in the radio
access network (e.g. market-follower MNO).
Analyst consensus is that MVNOs are likely to grab
10% to 20% market share in the long run. From an
individual MVNOs point of view, success depends on
the quality of the relationship or interface between the
MVNO and the host MNO under strategic and operational, commercial and technical, contractual and
human aspects:
The MVNO management team must have a clear
focus and expertise on and in service and content
creation, branding, marketing and sales.
The MVNO should follow a strategy and emphasize
strengths that complement the MNO core business
rather than attempting a frontal attack.
The MNO network strategy must be consistent with
the MVNO product offering (e.g. coverage, high
quality-of-service levels, broadband features).
A robust change management mechanism must
be established with the MNO, including price and
network services adjustments in particular; it is

Strategy and Marketing

essential to buy bulk capacity at a reasonable price

and have a mechanism for dynamic price and
volume adjustments.
A comprehensive contractual framework has to be
put in place, covering not only service rendered
and pricing, but also such details as end-user
ownership and exit terms.

ture and services supplier, we have ample experience

with regard to all strategic and operational aspects of
various MVNO business models and cover all functional areas ranging from technology, via network
architecture/operations and process/interface design to
the commercial and contractual topics governing the
relationship between MVNO and host MNO.
We employ a modular three-phase approach, the start
of each phase being determined by successful completion of one of the following project milestones:

The personal relationship between the various

hierarchical levels of MNO and MVNO staff is of
paramount importance.
The capability of sourcing mobile handsets at
competitive conditions is an important feature in
many markets (where handsets are sold and subsidized via operators sales channels), a partner for
handset sourcing may therefore be needed.

Our Approach
By drawing on the resources of a team that pioneered
the MVNE business concept at a leading infrastruc-

Kick-off workshop:
This multiple-day session is intended to create a
common understanding about the MVNO concept
and the available options, as well as the respective
pros and cons, with the client, in order to enter
the conceptual strategy and business plan blueprinting phase.
Go/no-go decision:
Managements decision to further pursue the
MVNO project, after reviewing its strategic options,
financial projections and risks, is a prerequisite for

Host MNO

MVNO

Operation, Administration and Maintenance

(OAM)

Operation, Administration and Maintenance

(OAM)

Customer Relationship Management

(CRM)

Fulfillment
Host
MNO

MVNO

HLR

HLR

Provisioning
Info

Music

Video

Game

...

Billing

Content Platform
MSC

MSC

RAN

MSC

GMSC

Service Delivery Platform (SDP)

Handset
Management

GMSC
VMSC

SGSN

GGSN

SIM Card
Management

SMSC

MMSC

...

GGSN
Glossary

Firewall

PSTN
PLMN
Internet
Host MNO Points of Interface (POI)

Firewall

Internet
PLMN
PSTN
MVNO Points of Interface (POI)

Our architectural blueprint for a full MVNO

GGSN
GMSC
GPRS
HLR
MMSC
MSC
PLMN
PSTN
RAN
SGSN
SMSC
VMSC

Gateway GPRS Support Node

Gateway Mobile Switching Centre
General Packet Radio Service
Home Location Register
Multimedia Messaging Service Centre
Mobile Switching Centre
Public Land Mobile Network
Public Switched Telephone Network
Radio Access Network
Serving GPRS Support Node
Short Message Service Centre
Voice Mail Service Centre

Innovation Services

entering phase two, where the platform is designed

in detail, sourcing requirements and criteria are
defined, and suppliers offers are solicited and
evaluated.
Buy decision:
The buy decisions leads to contract signature with
the suppliers and triggers the third and final phase
of implementation and launch.
Commercial launch:
The commercial launch marks the end of our
involvement, as our client turns to steady-state
MVNO operations.

constraints are also considered. International MVNO

case studies from our knowledge base can be used
to illustrate the key concepts. Upfront contacts with
the addressable MNOs in the market help to preassess the potentials of a host MNO agreement.
We present alternative market entry strategies, as
well as the technical and operational MVNO solutions available to our clients, to help them make the
right decision at an early stage.
Finally, blueprints are created for all functional
areas: draft business plan, risk assessment, sales/
distribution concept, network architecture concept,
operations concept, sourcing concept, content business concept and key requirement specifications.

The three modules, as presented in our graphical

MVNO consulting package overview, are described
below in more detail.

Platform Design and Supplier Selection Module:

Using the concepts and requirement specifications
from the blueprinting phase, supplier offers are
solicited and evaluated. This comprises RfI, RfP and
RfQ support.

Strategy and Business Plan Module:

This module comprises a feasibility study, taking
into account the competitive environment and
market forecasts, as well as the strengths and
weaknesses of the prospective MVNO. Regulatory

Partner selection with regard to the host MNO includes contract negotiation support and is paralleled

Host MNO

MVNO

Operation, Administration and Maintenance

(OAM)

Operation, Administration and Maintenance

(OAM)

Customer Relationship Management

(CRM)

Fulfillment
Host
MNO

MVNO

HLR

HLR

Provisioning
Info

Music

Video

Game

...

Billing

Content Platform
MSC

MSC

RAN

MSC

GMSC

Service Delivery Platform (SDP)

Handset
Management

GMSC
VMSC

SGSN

GGSN

SIM Card
Management

SMSC

MMSC

...

GGSN
Glossary

Firewall

PSTN
PLMN
Internet
Host MNO Points of Interface (POI)

Firewall

Internet
PLMN
PSTN
MVNO Points of Interface (POI)

Our architectural blueprint for a light MVNO

GGSN
GMSC
GPRS
HLR
MMSC
MSC
PLMN
PSTN
RAN
SGSN
SMSC
VMSC

Gateway GPRS Support Node

Gateway Mobile Switching Centre
General Packet Radio Service
Home Location Register
Multimedia Messaging Service Centre
Mobile Switching Centre
Public Land Mobile Network
Public Switched Telephone Network
Radio Access Network
Serving GPRS Support Node
Short Message Service Centre
Voice Mail Service Centre

Strategy and Marketing

by the design of a workable governance model. If

applicable, we also assist in negotiations with the
regulator.

business, both technically and operationally. This

includes provision of assistance in the organizational
setup and creation of reporting structures, in rolling
out the network components and initiating operations, in field trials, in the integration of the content
platform and in the implementation of the immediate going-to-market strategy measures.

Partner management also plays an important role

in content acquisition, and we support the relevant
concept design and negotiations.
Strategy, business plan, content concept, as well
as architecture and operations concepts are then
fine-tuned and supplemented by inputs from host
MNO agreements, content provider and sourcing
contracts. The precise definition of service level agreements (SLA) is a major part of operations
concept detailing and contract negotiation. Finally,
sufficient testing is performed to obtain reasonable
assurance of the workability and practical performance to be expected.

Our job is completed once the network is up and

running and successfully commercially launched.

Client Benefits

Implementation and Launch Module:

We accompany our clients in setting up their MVNO

Strategy, Infrastructure & Product

Strategy &
Commit

Infrastructure
Lifecycle
Management

MVNO aspirants benefit from a thorough upfront

screening of the chances for success of an MVNO
business in the target market, as well as of the projected financials and the associated risks. We recommend
promising approaches and strategies and investigate
the market for potential MNOs right from the start.

Operations

Product
Lifecycle
Management

Operations
Support &
Readiness

Fulfillment

Assurance

Billing &
Revenue
Management

Marketing & Offer Management

Costumer Relationship Management

Service Development & Management

Service Management & Operations

Resource Development & Management

Resource Management & Operations

Supply Chain Development & Management

Supplier/Partner Relationship Management

Enterprise Management
Strategic & Enterprise
Planning

Enterprice Risk
Management

Financial & Asset

Management

Business Process Framework (eTOM)

Enterprise Effectiveness
Management

Stakeholder & External

Relations Management

Knowledge & Research

Management

Human Resources
Management

Innovation Services

Clients receive strategy and business plan blueprints,

architectural and operational concepts, as well as requirement specifications as a basis for a substantiated
go/no-go management decision.
Furthermore, we use our expertise to achieve better
results for our clients in negotiating the terms and
conditions with host MNO, content partners and suppliers.
After finalizing strategy, business plan, technical
architecture and operational concepts for all functional areas, we assist the client in rolling out the
MVNO business up to and including commercial
launch, thus ensuring a smooth implementation.

Telecom/IT
platforms and
operations
workstream

Content
platforms
and handsets
workstream

Strategy, commercial
and contracts
workstream

Telecom/IT platforms
and operations
workstream

Content platforms
and handsets
workstream

Owner

Contributor

Contributor

Contributor

Contributor

Owner

Owner

Contributor

Contributor

Contributor

Owner

Contributor

Host MNO selection

Owner

Contributor

Contributor

Organisation set-up
Operations

Contributor

Owner

Contributor

Strategy
Product definition
Business plan
Sourcing
Partner selection

Our typical project setup

Go/no-go
decision

Kick-off
workshop

Strategy,
commercial
and contracts
workstream

Program management

Buy
decision

Commercial
launch

Phase 1:

Phase 2:

Phase 3:

Strategy and
business plan

Platform design and

supplier selection

Implementation and
launch

Market forecast and pricing

Regulatory aspects
Negotiations with MNOs
Draft business plan
Risk assessment
Sales/distribution concept

RfP/RfQ commercial lead

Partner selection
Governance concepts
Contracts finalization, incl.
content contracts
Final business plan

Contracts sign-off
Setup of reporting and
controlling organization
Market campaign
implementation

Network concept
Operations concept
Assessment of existing
OSS environment
Sourcing concept
Requirements specification

RfP/RfQ tech. support

Refine operations concept
with suppliers, incl. SLA
Acceptance and interoperability tests
Budget planning

Implementation roadmap
Implementation of network
components, OSS/BSS
and connectivity
Setup of tech. organization
Field trials

RfP/RfQ tech. support

Content acquisition and
partner management
concept

Integrate content platform

in operations environment
Establish content
acquisition and partner
management

Content business strategy

Content operations mode
Content business plan
Requirements specification

Our modular MVNO consulting package

Our Services
We offer a broad range of advisory services, as presented in our portfolio matrix.
We position our individual solutions alongside services practices and service clusters.

Transaction Services

Optimization Services

Strategy and Marketing

Corporate Finance and M&A

Operations and Technology Management

Strategic Investment Management

Feasibility Study

Commercial and Financial Due Diligence

Business Plan Analysis and Benchmarking
Asset Valuation

Network Infrastructure and Operations

Due Diligence

Strategic Due Diligence

Management Assessment

Investor Business Plan Development

Roll Out Plan Review and Benchmarking

Licensing and Regulatory Affairs

Bankable Business Plan Negotiation

Project Finance

Operations Plan Review and Benchmarking

Going-to-Market Strategy Segmentation

Target Marketing Product Pricing Promotion
Sales Channels Customer Care

Financial Performance Measurement and

Benchmarking

Network and Process Performance

Measurement and Benchmarking

Organization Development

Forecasting and Budgeting

Business Process Reengineering

Process Audit and Improvement

Partner Selection and Sourcing

Service and Process Costing

Shared Delivery Regionalization and Centralization Outsourcing and Managed Services

Business Development
Growth and Transformation

Innovation Services

Mobile Virtual Network Operator

Mobile Virtual Network Enabler

Technology Appraisal and Roadmapping

Financial Modelling and Financial Engineering

Value Added Services

Network Planning and Migration

Network Infrastructure Sharing

Contact
Investelecom Inc.
P.O. Box 32643
Ras Al Khaimah
United Arab Emirates
info@investele.com
www.investele.com