Since their introduction in the early 1990s, Mobile Virtual Network Operators (MVNOs) have become a dependable revenue source within the telecommunications market.
Interest in the MVNO model has fluctuated over recent years but has surged lately. This renewed attention spans a variety of service types — from data-focused MVNOs supporting machine-to-machine (M2M) applications to cloud-based service aggregators that address bring-your-own-device (BYOD) requirements for small and medium-sized enterprises.
Events such as the recent MVNO congress in Paris highlight the strong market potential for new MVNO entrants. The critical question for prospective operators is what is required to launch and sustain a compelling mobile offering that customers can access seamlessly.
One clear trend is the strategic outsourcing of integrated business support systems (BSS). Because MVNOs typically do not possess the legacy infrastructure of major mobile network operators (MNOs), a managed-service approach can shorten time-to-market and reduce operational expenses.
At the same time, MVNOs need to retain meaningful control over their service offerings and delivery. That often motivates operators to own portions of the back-office infrastructure and to be as close as practical to the core network.
Integrated BSS — where billing, policy and charging, and analytics operate together to create a unified customer experience — presents a balanced option. This hybrid model reduces risk while giving MVNOs a level of control that avoids the cost and complexity associated with owning the entire technology stack.
For established MVNOs with growing, profitable subscriber bases, investing in additional infrastructure can be sensible to gain more direct control. For greenfield start-ups, however, front-loading cost and complexity can be harmful: the burden of infrastructure investment may determine an MVNO’s success more than the quality of its market proposition.
Given that traditional mobile voice and messaging revenues are declining, MVNOs have an opportunity to craft convergent offerings. By forming strategic commercial partnerships, they can combine mobility with cloud computing and over-the-top services to create differentiated value for customers.
When telecom and IT services converge, operators require finer granularity in rating and billing. Linking pricing plans to quality of service, and ensuring a consistent customer experience through integrated policy management and analytics, become essential capabilities. An integrated BSS can provide the technical foundation to support these demands effectively.
In a constrained economic environment, MVNOs must control supplier costs and maximize operational efficiency to present competitive offers without triggering damaging lowest-price competition. Such price wars can erode brand value and introduce significant financial risk.
Outsourcing BSS operations gives MVNOs access to economies of scale and cost efficiencies while allowing them to retain the control necessary to protect their brand and service quality.
In summary, a thoughtfully outsourced, integrated BSS approach offers MVNOs a practical combination of reduced risk and meaningful control — an effective path to sustainable revenue generation in a highly competitive marketplace.