Log in
Your Local Ericsson site
  1. 2006 /

News Archive

MVNO partnership lifts operator revenue

The wholesale, or Mobile Virtual Network Operator (MVNO), market has grown substantially in recent years, especially in mature markets, and is expected to reach 100 million subscribers worldwide by 2010. For the traditional network operator, hosting MVNOs is a way to leverage on investments and attract new customers.

August 1, 2006

Ericsson has several years of experience working with different types of players within the wholesale/MVNO area in Great Britain, Ireland, Sweden, Australia and Japan. Put simply, there are two roles in this market place: the Mobile Network Operator (MNO), which sells capacity and other types of capabilities to the MVNO, and the MVNO itself, which repackages and sells the capacity and so on to end users or enterprise customers.


With its MVNO Partnership offering Ericsson can help mobile network operators launch and sustain a successful wholesale business model. The preferred MVNO owns a strong brand that hopes to leverage in the telecommunication area to increase its revenue by offering mobile services to its customers.

 

But why would the operator want to open up its network and create another competitor in an already crowded marketplace? Jonas Lindh, strategic product manager at Business Consulting within Ericsson, says the wholesale business model is an opportunity for operators to better utilize existing capacity without having to bear the cost for acquiring new customers. "Also, if planned and implemented successfully, the operator will, through the MVNO brand, address untapped customer segments," he says.

 

Sprint has for instance chosen to work with MVNO Virgin Mobile, which focuses on the under-30 age segment where Sprint has not been very active. Virgin Mobile's offering has attracted about 4 million subscribers in the US, which means increased market share for Sprint.

 

With the Wholesale offering Ericsson helps operators establish a successful wholesale business. Ericsson initially offers consultancy and in the later phases also technology - hosted or integrated.


The first step is to explore possibilities, to get an understanding of the challenges, untapped opportunities, and the different options available to the MVNO. Ericsson then helps the customer define its wholesale strategies, including what should be included in the offering, whether it should only include network capacity or if billing and other services should also be available to the MVNO.

 

"The third phase involves business planning to determine the shape of the agreement with the MVNO as well as how it will work technology-wise," Lindh says. Business-model implementation, launch, and strategies for and during the launch follow. "Ericsson then supports the operator with lifecycle management, looking at if the partnership is creating enough revenue," he says. By looking at market and business performance it can also be evaluated whether the MVNO is the partner of choice for the network operator.

 

"All MVNO partnership business models look different depending on the market, what the operator wants to get out of the partnership, their brand positioning, conditions and capabilities. Our MVNO Partnership offering can be customized to each situation. That, along with Ericsson's leadership in the telecom business, global insight into the operator business and experiences in working in this market area is what makes this offering so strong."