MVNO

An MVNO, or mobile virtual network operator, is a company that does not own a licensed frequency spectrum, but resells wireless services under their own brand name, while piggybacking on the network of an incumbent mobile phone operator. An MVNO is usually responsible for the customer care management of its service as well as offering special services like mobile television or mobile music applications. MVNOs emerged at the end of the last decade, but the MVNO trend is just starting to kick-off in 2006.

The industry recognizes Virgin Mobile as the first MVNO since it launched in the United Kingdom in 1999, and like most of the early entrants that followed it, Virgin focused on cheap prices as a motivator to would-be subscribers. The MVNO sector today is mostly comprised of so-called “lifestyle MVNOs,” which focus on value-added services and niche mobile content offerings to pull in subscribers. A market begins to attract MVNOs once it near saturation—an incumbent carrier can start wholesaling its network to brands like Virgin, Disney and others as a way of pulling subscribers away from a competitor. As hundreds of MVNOs have announced plans to launch in the already crowded MVNO sector in the U.S., analysts expect a shake out in the sector that will see few players standing in a year’s time.