MVNOs are having a real moment right now. They have amassed millions of customers at an unprecedented pace, and are outshining incumbents in affordability, customer satisfaction and ease of use.
What is fueling the MVNO boom? Why should you seize the moment to enter this thriving market now? And what is the smartest way to launch your own successful MVNO?
Let’s dive in.
What exactly is a Mobile Virtual Network Operator?
Firstly, let’s get the jargon out of the way. Mobile Virtual Network Operators, or “MVNOs” for short, don’t own or operate their own physical mobile network. Instead, MVNOs lease wireless access from major carriers like AT&T, T-Mobile or Verizon, which they then repackage in their own branding.
With this business model, MVNOs leave the costly development and maintenance of the wireless network infrastructure to the carriers and instead focus on branding, marketing, and distribution.
MVNOs are the fastest growing type of wireless providers in the US and include lifestyle brands like Ryan Reynolds’ Mint Mobile, cable-mobile bundles like Xfinity Mobile and Spectrum Mobile, and Big Tech offshoots like Google Fi.
What is fueling the MVNO frenzy?
There are multiple factors at play in the meteoric rise of MVNOs.
Firstly, today’s consumers expect flexibility, affordability, and personalized services, driving them towards MVNOs that offer tailored packages suited towards their individual needs.
With the ability to create distinctive brand identities and service offerings, MVNOs can carve out a niche in the market, appealing to segments overlooked by larger carriers.
Secondly, modern consumers are growing ever more data hungry and the number of connected devices per user is surging with new smartwatches, tablets and VR devices hitting the market. As MVNOs are more nimble in adapting to these new technological and behavioral trends than traditional carriers, they are able to capitalize on emerging technologies faster.
The numbers speak for themselves. The US MVNO market alone is expected to reach $17 billion by 2029. But that still only adds up to about 5% of the total US wireless market, underlining the eye-watering scale of opportunity that MVNOs are tackling.
How to launch an MVNO
What you need to consider:
The truth is, traditionally, setting up your own MVNO is highly complex. Next to setting up your marketing and distribution, you first need to assemble a number of technical and regulatory components to get your MVNO off the ground:
Network access: To access wholesale connectivity, you first need to invest 6-9 months into sourcing and negotiating contracts with telecom carriers, with no guarantee of competitive commercials and little room to customize plan design.
Upfront commitments: In order to even be considered by the big carriers, these contracts demand millions of dollars in volume commitments paid upfront, introducing a significant risk factor.
Integrating with the carrier's network: As there are no industry standards for API design and documentation, you need to devote another 6 months of costly engineering resources just to integrate with the carrier’s legacy systems.
Hiring entire teams to build the software stack from scratch: In addition to the integration effort, you still need to build or source systems for checkout & billing, SIM provisioning, subscription management, user analytics and customer support in order to go to market.
Regulatory compliance: Even if you manage to jump all of these hurdles, you also have to acquire a carrier of record registration to offer phone plans, not to mention navigating the hundreds of thousands of different potential filing requirements resulting from federal, state, and local telecom taxes.
In a nutshell, the complexity of stitching together all these moving parts makes it prohibitively expensive for most organizations to launch and run an MVNO, especially when it’s not your core business.
The solution: Use a Telecom-as-a-Service platform
Telecom-as-a-Service presents a comprehensive solution to overcome the challenges of launching an MVNO:
End-to-end support: From wholesale connectivity and telecom billing software to AI-enhanced customer support, business analytics, marketing automation and telecom CRM, Telecom-as-a-Service covers every aspect of the subscription lifecycle.
Seamless integration: With one single integration, businesses can access all necessary components, ensuring a smoother user experience and operational efficiency.
Cost-effectiveness: By handling technical and regulatory burdens, Telecom-as-a-Service eliminates upfront costs and reduces financial risks for businesses of any size.
Market accessibility: Telecom-as-a-Service democratizes access to the mobile connectivity market by bundling access to multiple networks in one platform, enabling businesses to launch branded mobile services with ease on any network of their choice.
Focus: By outsourcing technical and regulatory requirements, MVNOs can redirect resources towards their core business activities, enhancing competitiveness and agility.
With the advent of Telecom-as-a-Service, the massive mobile connectivity market is now within grasp for any business, spurring on the frequency of new MVNOs being minted.