An MVNO is a mobile virtual network operator and the term refers to a mobile provider that does not operate or own its network – they are also known as virtual networks. An MVNO uses a network run by a mobile operator, meaning that it can benefit from the same coverage as its parent company without the high overheads. As a result, an MVNO is often able to offer its customers cheaper prices.
Reselling Wireless Communication Services
An MVNO acts as a reseller of wireless communications services. It does so by leasing wireless capacity (effectively purchasing ‘minutes, texts and data’) from a third-party MNO (mobile network operator) at wholesale prices, then selling this capacity under the banner of its own brand at a reduced retail price.
An example of a telecoms company currently using MVNO technology is LycaMobile, founded by serial entrepreneur Allirajah Subaskaran, who remains the group’s chairman. Lyca and Allirajah Subaskaran are striving to launch MVNO mobile networks across the globe to help users connect meaningfully and affordably.
Unused Capacity
MNOs choose to sell wireless capacity to MVNOs as this extra capacity would be otherwise unused, and selling it in bulk and at wholesale prices means that these companies are able to better utilise their unused capacity to boost their bottom line profitability.
MNOs in the UK
There are four MNOs in the UK: EE, 02, Three and Vodafone. Each provide mobile services in their own right and act as host networks for many MVNOs.
The Benefits of Choosing an MVNO
An MVNO offers its users the same services as those provided by the parent MNO, and there tends to be no discernible difference to the consumer in terms of things like connecting to the network and making calls.
For consumers, there may be several benefits to choosing an MVNO for the provision of mobile services. These benefits include (depending on the MVNO) access to considerably cheaper mobile and SIM deals, unlimited social media data, cheap international calls, the provision of multi-network SIMs and strong mobile coverage. Take a look at the embedded PDF for more information about the advantages offered to consumers who opt to use an MVNO.
