It’s Better to Rent than to Create. How the Telecom and Retail Domains Can Benefit from MVNOs
Updated: Sep 1, 2023
For the first time, I heard about the strange abbreviation MVNO (mobile virtual network operator) in 2000. That time was just a start stage for this technology. And looking back, I understand MVNO became one of the oldest ways to strengthen telecom’s position in cross-industrial partnerships.
End-users still can’t catch the difference between CSP and MVNO. And they don’t need to. It’s not compulsory to know who provides you with connection services when you can use the flexible coverage no matter where you are. Now, there is nothing changed for subscribers, except the fact they are using MVNO more frequently. The reason is enterprises bet on this approach. Following predictions, the global MVNO market will reach $91.6 bln by 2026. In 2020, experts valued it at $61.9 bln.
Demand creates supply. So, we are here to discover why domains like retail and telecom believe in MVNO efficiency. Scroll down to enjoy facts, trends, and use cases.
MVNO in Telecom
Why do communication service providers use mobile virtual network operators?
Telecom uses the MVNO business model in two ways:
They are providers.
CSPs rent to other companies their wireless network infrastructure. This way, they engage a broad audience and become B2C & B2B oriented. Such a position makes them competitive and, accordingly, increases their level of income.
They are clients.
Did you know that companies like Verizon, Orange and Telefonica have their MVNOs? They create new brands and try to engage different segments of their audience. In this case, it’s easier to manage offers, conduct A/B testing or grow a loyal audience, etc.
Telco operators can also use MVNO business models to fill gaps in their coverage. Let me remind you that MVNO can connect with one or several infrastructures owned by different providers. This way, CSPs might ensure service versatility and seamless usage worldwide.
Pandemic and military conflicts created a global economic & communication crisis. But for telecom operators, it’s a suitable time to expand their services and support business recovery.
Trends for 2022
This year, CSPs will continue to search for their potential clients and retain current ones with MVNOs. They'll involve other industries like manufacturing in the MVNO network as well.
Because of the fierce competition, they will strive to create several MVNOs to stay everywhere and support competitiveness.
The tech boom will become a basis for new services. Telecom operators will implement blockchain technology, AI, and 5G to satisfy various customer needs ensuring convenience, portability, and data security.
Case study
Who do you think are the core players in the MVNO market? That’s right, telco operators, software providers supporting MVNO businesses, and enterprises from different industries that use MVNOs.
We’re proud of our long-term partnership with a Belgian telecom company Effortel producing digital products for physical and virtual MNOs (mobile network operators). It aimed to build robust integration points between core banking and telco systems.
We supported Effortel with expertise in backend development concerning enterprise app integration. That connection involved 400 services and allowed the usage of telco accounts like bank ones and vice versa.
“Thanks to JEVERA’s work, we’re able to serve a vast amount of transactions,” shares Martin Petkov, COO at Effortel. “Our client has millions of customers, and all those transactions pass through the integration layer, so it’s essential that it’s available and highly performant at all times. JEVERA has brought their expertise to the table to ensure our integration layer doesn’t suffer any malfunctions or deficiencies from day one.”
MVNO in Retail
Why do retailers use mobile virtual network operators?
The retail industry also has great plans for MVNOs. Moreover, it already implements them. Business sharks like 7-Eleven, IKEA, Walmart, and others created their mobile virtual network operators to support convenient communication with buyers and increase their loyalty.
MVNO here is a smart way to provide clients with custom-centric offers, collect their data in real-time, and process them to discover peculiarities of buyer behavior & experience. This business model is preferably applicable to enterprises and store chains because they have a broad distributor network.
Mobile virtual network operators help retailers to increase their sales with cross-/up-selling, expand the audience and upgrade business models. The retail market is too competitive and dynamic. That’s why companies try to use MVNO's agility to retain buyers, starting with placing custom offers and ending with supporting omnichannel.
Case Study
You probably know that retail could be different. We’re used to highlighting the peculiarities of grocery and non-food stores. But the case is the fuel retail market is also a fascinating topic to talk about.
A case study by the international consulting company Cartesian caught my attention. They performed deep research to create a detailed MVNO launch plan for a fuel station chain.
The client aimed to engage buyers and grow market share through the MVNO implementation. It was the right choice because this approach can ensure close interaction with customers, a direct translation of brand values, and efficient cross-promotion.
“MVNO offered an economic & reliable business model that could be deployed easily to meet strategic and commercial objectives,” the Cartesian team believes.
You may also like: Retail Gas Station as a Profitable Business Model
Afterword
The mobile virtual network operator model is not something new. But it can change following market conditions remaining popular among telco operators, retailers, and other enterprises. I suppose that the time will show us more innovative scenarios of its usage soon.
If you prefer to act right now and upgrade your business with MVNO - just let us know. We’ll apply our expertise to accelerate the achievement of your strategic goals.