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Whither MVNOs - Champions of Canadian Customer Choice |
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November 2006 - IGB
Grant 514-849-3508, Brian Sharwood 416-413-9381, & Kevin Restivo 416-619-4926 |
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STUDY SUMMARY : |
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This report looks at Mobile Virtual Network Operators (MVNO). It examines questions such as:
What is an MVNO? Why are they needed? What are MVNO best practices? We look at a
number of MVNO business model examples, both in Canada and around the world. |
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KEY HIGHLIGHTS: |
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- Running a wireless phone service requires more than just building and connecting towers. Running
a wireless communications company needs attractive customer product, targeted marketing,
customer care systems and brand. MVNOs concentrate on the customer and the customer
support layer. They buy the connectivity, the towers, the network, from an underlying provider.
The MVNO can take on a number of other tasks required in the operation of a network including
billing, customer care, and distribution - as well as the core MVNO DNA of brand, content and
application provision. Canadian MVNOs illustrate unique perspectives and approaches.
- SeaBoard believes that MVNO providers will have over 1.2M subscribers by the end of 2010.
- The requirements for MVNO success are:
- An adversarial, yet supportive relationship with underlying network providers.
- The MVNO carriage agreement must allow the MVNO flexibility in pricing. Flexibility in MVNO
business models (and provision for business model evolution) too should be a hallmark of
supply agreements between MVNO and the underlying provider.
- An MVNO should bring something apart from just ‘brand’ to the table. The more alternate
capabilities, the better.
- The underlying carrier should be enthusiastic about MVNOs as customers. The network provider
should derive gain in more than just wholesale subscriber revenues. It can learn from their MVNO
partners/customers; encourage your MVNOs to experiment. Provide creative, unstructured
business environment.
- MVNOs offer Canadians choice – as such the MVNO can help assuage regulatory and political concerns about the absence of choice in the marketplace. MVNOs
can be a key element in carrier policy positions in the coming discussions about
Canada’s spectrum policies – Canada’s carriers should do what they can to make
the MVNO model a success.
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