Network model & partner contracting

There is no single right way to build an MVNO network model. The options are numerous but, broadly speaking, range from:

Full MVNO

The full MVNO operates its own core network including HLR, MSC, interconnect, SMS-C, etc and uses its network host in a very limited way.

The MVNO has complete control over the SIM, retail pricing, branding, product design and delivery, billing and customer care. A full MVNO has total control over its product and can implement new pricing or special offers on a minute-by-minute basis.

Thin MVNO

The thin MVNO has more limited control over its product and customer experience. It can determine its own branding and pricing strategies but does not own the SIM. It can manage its own customer care and billing but has no meaningful control over all other aspects of the customer experience.

Generally, changing the product or pricing details is more difficult for the thin MVNO and will rely on the MNO to implement in their system.

Service provider

The service provider model requires very limited capital investment on the part of the MVNO. As a result the service provider MVNO has no control over retail pricing and generally simply co-brands the retail SIM of the host network.

For the company with capital to invest the full MVNO option is the most competitive and most valuable option. The investment is considerable but it is the only model where the MVNO actually ‘owns’ the subscriber. This gives the MVNO great bargaining power and operational flexibility. The host network can be changed without any effect on the user experience. For this reason the margins are generally highest on this model and the value of the company is greatest. If the owner of the MVNO is looking to exit the business in the future then it is likely that this model will be the most attractive.

A thin MVNO can offer good margins too, but the lack of true ownership of the subscriber severely limits exit options and the capital value of the business.

The service provider requires little investment, however, it must be noted that both margins and exit options for the operator are more limited.

Where capital is limited it can be a wise stragegy to start ‘thin’ and then move to a more full MVNO model, however, keeping this option available means careful selection of the host network, wholesale agreement and the network technology.

Hebitel can assist in working through these options and determining the right strategy for your MVNO.