Blog Posts

MVNOs: virtualization enables new models

Posted 28 October 2015 by Steve Coppins

Somebody asked me the other day if mobile virtual network operators (MVNOs) are an example of a rudimentary form of virtualization? After all, they rely on infrastructure owned by one or more facilities-based operators.

My response was that I wouldn’t call MVNOs rudimentary – I would call them pioneers.

I can see parallels between the blossoming of the MVNO business and the development of switchless resellers on fixed networks in the period following full deregulation. There are many differences of course – the switchless resellers were reliant on regulatory change whereas the MVNO generation has largely been embraced by the MNO. But there is also an obvious parallel in that the successful switchless resellers ended up purchasing switches and the more dynamic and successful MVNOs invariably purchase core network elements.

Whereas the switchless reseller invariably had to go to one of the major telecommunications vendors for their switch (greatly benefiting the companies I used to work for, Nortel and Siemens/NSN), key technology advances including software defined networks, network functions virtualization and the availability of COTS hardware from a multiplicity of vendors all mean that today’s MVNO is able to move into core network ownership much more easily, quickly and cost effectively than the equivalent step which would be made by the switchless reseller.

One obvious factor in this is choice. The switchless resellers were required to purchase the smallest possible version of very large expensive switches, which limited them from day one. In contrast, an MVNO can invest in a virtual mobile core solution from Quortus, which can be deployed on a very cheap COTS hardware platform or hosted within a data center, for a tiny fraction of the price of a traditional mobile core network.

In fact the space has opened up for new generation vendors such as Quortus because these “start small, grow as the MVNO requires” models are entirely incompatible with the big network focus of major core network vendors, whose products are completely oriented around the needs of the tier 1 MNOs.

So what we provide is the ability for the MVNO to move into core network ownership much more cost effectively and establish a better degree of control of the network and the services that they provide to their end customers, whilst reducing the reliance on the host MNO and the amount of money that flows straight from the MVNO to that host MNO.And because it is all based on easy to maintain and customizable software and is not dependent on huge or proprietary platforms, rigidly controlled by the traditional tier 1 vendors, all of the benefits of the evolution, the pace of the evolution and much more of the cost of the evolution are under the control of the customer MVNO.

The end result is that the MVNO can now shape a network around its business. From standalone remote networks for sites like oil rigs, to ambitious projects that allow a SIM to connect anywhere in the world, anything is possible.

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