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Mobile Virtual Network Operators Benefit from Value-added Service Business Models, European Countries Network Operators bound by Legislations for Excess Bandwidth Utilization Norms

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Published on : Mar 01, 2016

In telecommunication services, mobile virtual network operator (MVNO) refers to an entity that resells services from a third-party mobile network operator (MNO). In this arrangement, MVNO use the existing infrastructure of network operators having their own cost structure, voice and data plans, and customer handling systems. It is a win-win situation for both MNO and MVNO; MNOs have excess bandwidths that they offload to MVNOs at wholesale rates making a small profit in return, which is otherwise not used. For MVNOs, this arrangement helps to render services at low prices, since they do not have to develop or maintain any infrastructure and also do not have to bear costs to obtain license for using the radio frequency spectrum.

In parts of the world, such as the countries of Europe, MVNOs receive support from governing bodies as well network operators for rendering services. MVOs support MVNOs as this results in extra earnings for the network operators through renting their infrastructure. This, in turn helps MNOs with higher revenues to gain competitive advantage over other network operators. In countries of Europe, government stipulations mandate MNOs to support MVNOs for leasing wireless bandwidth and for sales of excess radio frequency spectrum through third-party arrangement. 

As telecommunication speeds increase from 3G to 4G, MVNOs have the capacity to provide value-added service and higher speed for consumers. This has also enhanced the service capabilities of network operators to segregate bandwidths and classify services as per needs. For example, ethnic communities living in European countries can better stay in touch with friends and family due to dropped international calling charges. Due to bandwidth segregation for services, the radio frequency spectrum not utilizable for high volume data is used for voice calling, which is economical for both service provider and consumer.

MVNOs of full operational type account for the highest demand due to value-added services. Other than this, full MVNOs also provide differentiator services that is helping to gain popularity and enjoy benefits of higher gains.  Discount type MVNOs registered the highest demand in the past, this is because consumers have been trying to benefit from low cost calling services.