Have you heard of virtual operator services?
Unlike classic operators that own their own wireless network infrastructure, Mobile Virtual Network Operators (MVNOs) rent wireless infrastructure from a larger carrier and sell their services. Let’s explain!
These mobile operators use the RAN Sharing Model[1] to rent coverage space from large operators, then offer mobile telecom services. The “virtual” element of an MVNO refers to the fact that these operators don’t possess their own infrastructure. Instead, they rely on larger operators to extend cell coverage to end-users.
Mobile Virtual Network Operators in Practice
At this point, you may be wondering, “If the cell signal originates from the large operator, wouldn’t it be easier for customers to sign a contract directly from the source?”
Actually, contracting through a virtual operator provides several advantages for building owners and end-users alike.
Large operators rent the space in the electromagnetic spectrum (phone signal, minutes, SMS and gigabytes of internet) to virtual operators at a “wholesale” price, which means service is more affordable when it’s resold. As a result, customers pay less for cell services without compromising on coverage area or signal quality.
Venue owners benefit from partnering with a virtual operator, through
- Flexible service plans improve support for industries with specific needs;
- Non-exclusive contracts allow the consumer to work with multiple carriers;
- More accessible pricing expands access to the mobile network;
- Support for a younger audience that’s typically unsatisfied with traditional operators;
- Increased indirect competition forces large operators to improve their services.
On the other hand, connecting to a rented spectrum means that the signal from the virtual operator is not always as fast as that of the “official operator.” In addition, coverage may not be available in all locations across the country, potentially failing the consumer at critical moments.
The Global Expansion of Virtual Networks
The MVNO offer has been around for a long time and is growing in popularity. We have several successful examples throughout the world, such as Virgin Mobile, which provided cell service in the United States, Mexico, Colombia, Chile, Australia, Canada, United Kingdom, and other countries by the end of 2020.
And MVNOs aren’t just popular in developed countries: Colombia leads the market for MVNOs in Latin America, with adoption rates similar to European countries. By December or 2020, Brazil had 105 MVNOs — with ten authorized operators and 95 accredited operators. Seventy percent of the lines within these networks are machine-based, while the other 30% are shared between smartphones and tablets.
As new technologies roll out across the telecommunications industry, consumers are looking for more personalized experiences, and the number of virtual operators worldwide continues to expand.
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