MVNO business model - the commercial agreement
Ever wondered why the MNOs accept the virtual operators to interconnect?
- MVNO Business Model – Niche Market
- Marketing investment
The main reason why MNOs accept MVNOs to interconnect is that they can partially serve a niche market without investing in marketing efforts. This means the MNO can get a part of the profits of that market.
Now let’s look at what the business agreement means, the importance of the business model and the main questions you should ask your MNO regarding the agreement.
MNO - MVNO commercial agreement
The main driver of the business of mobile operators is by far the marketing Stage of the business. This means ads, a local shop, and of course, employees and the entire activities that operators use to collect money from subscribers. This area of a mobile operator’s budget (Marketing) means nearly 45% of the total budget.
There are a few reasons MNOs and MVNOs need each other to best serve their customers.
MVNO business model
The main problem of a virtual operator lies in the MVNO business model. Most of the startups lack the strategies needed to grow their business.
The first thing an MVNO should do to create its business model is to first decide on a niche market because is mandatory to communicate and provide services to a a specific segment.
An example would be an MVNO that created a business model out of selling telecommunication services to the African population in France that are charged cheaper for the calls they make towards the African countries. The MVNO uses technical solutions that serve this business model – cheaper routes from France to Africa.
There are a lot of business arrangements that can be made in this field. Multiple MVNOs target the travelers – they offer SIM cards for the people that travel around the world, and they have special roaming prices. There is a partnership between an MVNO and an airline company that can distribute the SIM cards, and they can both enjoy the branding benefits.
Pathway to creating your MVNO business model
Once your MVNO business model is in place, you move on to choose which MNO you are going to interconnect with and which one has the price offer that suits your business case.
MVNO agreement - What to ask your MNO
Make sure you have a list of all the technical issues you need for your business. Now that all is set, and you have chosen an MNO, the following questions must be asked as a part of the MVNO agreement:
Our solutions for MVNO Startup businesses
Once the MVNO business model is settled you need to get to the technical part of the MVNO startup. You have to build your network infrastructure and for that you need Core Network equipment.
At YateBTS, we offer solutions to cut across all challenges faced by both MNOs and MVNOs.
We have manufactured software-defined equipment for mobile networks serving MNOs and MVNOs, making it affordable and solving the cost factor. One of the main values of our company is the public pricing policy, offering the lowest cost and shortest path for MVNOs to achieve profitability. We helped interconnecting more than 20 mobile operators over time.
Types of tests for MVNO Startup
Even if you have a clear idea about the kind of virtual operator you want to be and your MVNO business model is in place, you still need to test the services you need to provide.
The VoLTE Lab is a fully configured and functional test suite for Voice-over-LTE and a full LTE/GSM network that includes:
✔ LTE LabKit – configurable test eNodeB/BTS
✔ MiniCore – software-defined compact IMS Core Network
✔ Two iPhone 6s – UE with good VoLTE implementation