A MVNO (Mobile Virtual Network Operator), in simple terms, is a wireless communication service provider that leases network capacity from traditional mobile network operators (MNOs) rather than owning their own network infrastructure. The purpose of this is to take these leased capacities and resell the MNOs mobile services to customers under the MVNOs own brand name and pricing structure. These services can include voice services, text and data plans and mobile devices (BasuMallick, 2022).
The way that MVNOs differentiate themselves from MNOs is through providing their customers with additional services and features beyond what the MNO offers. They may allow for data rollover or provide unlimited data usage for certain apps. These value-added services help MVNOs to attract customers and to compete in the market.
MVNOs are growing in popularity as they allow organizations to provide their customers with unique mobile communication services and features without having to change their core business or invest in building and maintaining their own network infrastructure. The predicted worldwide MVNO market size growth is a testament to MVNOs growing popularity with this market predicted to grow from USD 66.13 Billion in 2023 to USD 91.68 Billion in 2028 (Mordor Intelligence, n.d.).
Some popular MVNOs in the South Africa market are FNB Connect, Standard Bank Mobile and PnP Mobile (Illidge, 2023). Other MVNOs better known world-wide are Virgin Mobile, Metro by T-Mobile and Google Fi Wireless.
Advantages of being a MVNO:
- Cost-effectiveness: MVNOs often have lower operating costs compared to MNOs, allowing them to offer more affordable products to their customers.
- Quick market entry: Setting up a MVNO can be faster and less complicated than starting a MNO, allowing for quicker market entry.
- Partnership opportunities: MVNOs can form partnerships with other organizations or brands to enhance their offerings to their customers.
Disadvantages of being a MVNO:
- Limited network infrastructure control: MVNOs depend on the network infrastructure of the host mobile network operator. This limits their ability to fully control and optimize the quality of the services provided to their customers.
- Limited power: MVNOs are entirely dependent on the decisions made by the MNO regarding investments made into new technologies and network upgrades.
- Service prioritization: In some cases, MNOs may prioritize their own customers’ service quality over the MVNOs customers during peak network usage, potentially decreasing the quality of service provided to the MVNOs customers.
BasuMallick , C. (2022, December 15). What Is Mobile Virtual Network Operator (MVNO)? Working, Services, and Examples. Spiceworks. https://www.spiceworks.com/tech/networking/articles/mobile-virtual-network-operator/#:~:text=MVNOs%20purchase%20bulk%20access%20to,call%20plans%2C%20and%20mobile%20phones
Illidge, M. (2023, February 9). South Africa’s top MVNOs. https://mybroadband.co.za/news/cellular/479505-south-africas-top-mvnos-2.html
Mordor Intelligence. (n.d.). Mobile Virtual Network Operator (MVNO) Market Size. MVNO MARKET SIZE & SHARE ANALYSIS – GROWTH TRENDS & FORECASTS (2023 – 2028). https://www.mordorintelligence.com/industry-reports/mobile-virtual-network-operator-mvno-market