The popularity of MVNOs is consistently on the rise. By 2018 there were more than 1,200 MVNOs all over the world, majority of which are in Europe. The number of MVNO clients is expected to double from 2018 to 2019. So if you are thinking of starting an MVNO go ahead. The following are reasons why you should start an MVNO.

 How MVNOs Work

MVNOs work with smaller customer groups compared to traditional mobile operators. This means their income is limited to specific segments. However, any company/individual that engages this business has the advantage of gaining other income sources. It can be a great opportunity when it is aligned with the organization’s core business.

Let’s look at the example of a branded reseller model. In this case the legacy network operator offers technical services such as customer service, billing, network functionality, customer activation and radio access. The MVNO is left to focus on communication, branding, sales and distribution, and marketing.

The model will create value proposition and a new face for clients using an existing network. A full MVNO, on the other hand, handles all functions apart from radio access. It cannot handle radio access since it does not have a license to do so.

These different models mean that revenue is divided differently. Different models mean there is no definite revenue sharing structure. Majority can be used interchangeably as long as the MVNO is operational. This is because the operator may switch from a full MVNO to a branded reseller and vice versa. 

There are Mobile Virtual Network Operators that have a revenue-sharing model that is determined by percentage of earnings. In this scenario, an operator will share a specific percentage of their after tax earnings, paid by MVNO clients. As the functions by the MVNO increases, the percentage of revenue shared increases.  

Creating a wholesale agreement with a legacy operator is another option. In this case the MVNO can purchase SMS, data and voice minutes on a wholesale basis, then resells the same to the customers. Some prefer to operate with a revenue-per-subscriber model. This is where the legacy operator pays the MVNO an agreed upon amount for every subscriber they bring to the network.

Benefits of an MVNO

MVNOs as subsidiaries of retailers have the ability to enjoy additional revenue. Earnings are increased when subscribers visit their stores to top-up their accounts, sign a new deal or have plan questions. Once a subscriber is in a store, they may make planned-but-postponed or impulsive purchases.

Retail MVNOs, as a result of knowing their clients better using newly available subscriber data, can offer products that are more relevant to their customers. Such MVNOs can offer each subscriber incentives based on their telecommunication usage and shopping patterns. The result is a higher lead to sales conversions.

Conclusion

Starting an MVNO is a good business decision. More and more telecommunication subscribers are using MVNOs. This means there is no limit to the number of subscribers you can get. If you want to start one, contact Tegloo5 today. They will provide you with the best options and support to kick-start your MVNO business.