Navigating the business world without the right digital resources can put your business behind the competition, which is why more and more business owners and industry leaders are trying to find and implement the best cellular connectivity solutions for their fleet of devices. One of the primary network solutions in modern telecommunications is Mobile Virtual Network Operators (MVNOs), but the current MVNO market is rapidly changing, especially due to 5G mobile technology. Let us walk you through MVNO benefits and challenges so you can make the right decision for your business and connectivity needs.
What is an MVNO?
MVNOs are branded resellers of mobile services. Instead of owning their own mobile spectrum license, these companies use their brand name to market their service while using the network of a licensed mobile operator. A “full” MVNO offers both access to a network and customer service, so users will have access to a Mobile Network Operator (MNO) , but managing SIM cards, calls, and data flow is all done through the MVNO business.
You can think of MVNOs as a service that is rented out; network carriers pay for and manage their huge infrastructure of cell towers and frequencies, but they don’t use all of the network capacity that they’ve created. MVNOs can “rent” out some of that network through their own company, which not only keeps the MVNO company in business, but also helps MNOs pay for the cost of establishing the network. This way, big networks can afford to run their extensive operations while smaller MVNOs go straight to the customer and get phone plans up and running.
Difference Between MVNOs and MNOs
The main difference between MVNOs and MNOs is that MVNOs don’t own their own network while MNOs do. For example, an MVNO doesn’t own its own radio network, but it can use the radio network of an MNO to provide services by paying an MNO. An MNO controls who uses its radio network spectrum, whether that be an MVNO or other end users.
Benefits of MVNOs
MVNOs have some major advantages for end users and businesses, which we’ll dive into here.
Cost Efficient
Since MNOs pay for the upkeep and rights to a network and MVNOs simply pay to have access to that network, the end users can typically get the great coverage of a large network at a much more competitive price. Taking full advantage of network capacity without having to own that network frees up costs that would otherwise be passed down to the consumer, which is cheaper for the MVNO and consumers in the end.
Differentiation with 5G
You also tend to get better, more personalized customer service since you’re working with a smaller operation. A great MVNO has the potential to be a powerful service for the consumer, not just a product. Plus, with 5G capabilities, a lot of MVNOs can offer more options for the same coverage. Since MVNOs aren’t focused on the major network issues, these businesses can hone in on tailored services for their market, like offering competitive international rates that their customers can likely afford.
Challenges
MVNOs are a great connectivity solution for a lot of businesses, but there are a couple of limitations to be aware of, too.
Fewer perks
While MVNOs are going to be far more affordable, there will also be fewer perks that you get with a larger service directly through an MNO. Bigger operators will offer free gifts like movie tickets or bundling opportunities with other services. MVNOs are much more stripped back, where you simply pay for the phone service without any extra bonuses.
Needs to increase adaptability
Especially as MVNOs try to scale with quickly advancing technology and market changes, it can be difficult to remain competitive and profitable. MVNOs will need to be more agile in the future to remain relevant in the network space, even if it means outpacing MNOs where possible.
MVNOs depend on MNOs
While it’s certainly advantageous to use MNO networks and resources without paying the same prices, it also makes MVNOs reliable on the success and health of whatever MNO they use. If the MNO market is falling behind, then MVNOs tend to fall behind, too. MVNOs are also competing with MNOs who lower their price points, so MVNO companies also have this to consider moving forward.
How Does 5G Fit Into The MVNO Equation?
5G has changed the network landscape for both MNOs and MVNOs with its faster data transfer speeds, increased device capacity, lower latency, etc. It can be especially tricky for MVNOs since they do rely on MNOs; if the primary MNO that an MVNO uses doesn’t upgrade to 5G benefits, the MVNO doesn’t have those selling points for its customers, either.
That’s why there are a lot of discussions around “5G network slicing” where an MVNO owns its own 5G network slice that it can use as a part of its service offering. This would require them to deploy their own virtual network functions like applications so that their customers can access those 5G advantages.
Just like any connectivity platform or service, MVNO services are finding new ways to grow with the new 5G era. While this will come with some difficulties, there are also a lot of new and innovative solutions that MVNOs can use as they adapt to this competitive environment.
MVNO and Simon IoT
Despite the challenges that the MVNO space may face in the mobile market, there is great potential for MVNOs to capitalize on the space they now claim while 5G providers slowly adapt to their surroundings. You can learn more about the future of MVNOs here and discover just how useful MVNOs can be with the right service!
