How MVNOs Can Increase the Bottom Line of a Mobile Network Operator?

Customer churn is a major problem associated with telecom business nowadays. Due to an increase in competition amongst CSPs (Communication Service Providers), customers are receiving newer and better options with attractive pricing and features. Hence, they are changing their telecom service providers faster than ever before. This trend has made the task of making profit for an MNO (Mobile Network Operator) extremely challenging. However, evolving technologies and development of MVNO platform has provided an innovative way to increase the bottom line for a telecom company.

Utilizing MVNO and MVNE for Triple Advantage

For a large scale MNO, it is hard to create customized services that meet the requirements of every mobile user in a particular area. Hence, some subscribers feel left out and show their anger by terminating their subscription. This directly influences the revenue generation of the MNO. All the effort it has put into buying frequency spectrum, procuring infrastructure and creating alliances with mobile phone manufactures is offset by subscribers’ decision to move out.

The MNO is left with vast resources that are underutilized due to customer attrition. It cannot sell the frequency spectrum and infrastructure to competing companies as it will dilute his brand. Also, it is not a wise decision to rest on its laurels and watch its business stagnate due to customer migration. In this situation, MVNOs (Mobile Virtual Network Operators) come as a ray of hope for such an MNO.

Not only an MVNO can help an MNO in sustaining his business, it also offers a triple advantage, if utilized carefully. Have a look at the three advantages below:

First advantage: Revenue from customers who have left you

For an MNO, a partnership with an MVNO is like selling your resources such as voice minutes, data, SMS etc. in wholesale. In actuality, you are allowing an MVNO to use your spare spectrum and infrastructure, so you get consistent revenue through resources that otherwise would have been unused.

So, when you forge a partnership with an MVNO that covers the same region as yours, a major share of the customers that leave you go straight to that MVNO and subscribe to its services. When this happens, you indirectly profit from the same customers that have left you in the form of the revenue generated by your partner MVNO.

Second advantage: Revenue from customers who have left your competitors

If your competing MNOs’ customers also decide to leave them, then your MVNO can become an option for them. A major share of such customers will join your MVNO and indirectly provide revenue to you.

Third advantage: Revenue from new customers

With new mobile users entering the market, your MVNOs income will grow and so will your revenue.

The abovementioned example brings to light the advantages offered by a single MVNO. However, the same advantages can be leveraged by partnering with multiple MVNOs. The best way to accomplish this is by using an MVNO and MVNE platform.

Role of MVNE in MVNO Service

An MVNE (Mobile Virtual Network Enabler) is directly related with an MVNO’s performance and service. MVNE is called an enabler of services because it plays a vital role in creation of smaller MVNOs. An MVNE provides OSS/BSS solutions to the MVNOs along with setting up their virtual network. While bigger MVNOs have their very own OSS/BSS software and are generally responsible for billing their own customers, it is the smaller MVNOs that profit the most from MVNEs. Some of the major benefits of MVNE with regards to MVNO service and performance are listed below:

Better negotiations for pricing – An MVNE can be considered as a common link between multiple small MVNOs and an MNO. It has the responsibility of buying resources in bulk from an MNO. And we all know, bulk buying is considerably cheaper than buying a small amount. Hence, MVNEs are able to negotiate better deals with MNOs and procure resources e.g. calling minutes and SMS at a lower price. This helps an MVNO greatly and it is able to survive in the competitive telecom world.

More time to handle customer-facing tasks – With network setup, accounting and  billing-related activities handed over to an MVNE; an MVNO is able to focus more on offering day-to-day services and building its brand image.

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