An MVNO is a Mobile Virtual Network Operator. It is a company that doesn't own a licensed frequency spectrum. A MVNO resells wireless services under their own brand name using a licensed frequency spectrum of a mobile phone operator (MPO). MVNOs' roles and their relationships to the MPO vary from market to market. Usually, an MVNO is a company that works independently of the operator thus being able to decide its own pricing. The first MVNOs were launched in 1990s. Nowadays, there are over 200 MVNOs, and it is interesting to notice that not all of them are targeted to the consumer markets - there are also enterprise markets!
MPOs doesn't consider MVNOs as a competitive threat. There is a simple explanation to that. MVNO models mean lower operational costs for mobile operators, such as billing, sales, customer service and marketing. They also grow average revenue per user by providing new applications and tariff plans and also can help with difficult issues, such as how to deal with fixed-mobile convergence. Generally, there are three reasons for MPO to allow MVNOs on their networks. First, mobile operators often find it difficult to succeed in all customer segments. MVNOs are a way to implement a more specific marketing mix. Secondly, many MPOs have capacity, product and segment needs. An MVNO strategy can generate economies of scale for better network utilisation. Thirdly, MVNOs can help MPOs target customers with specialized service requirements and get customer niches that mobile operators can't get to.
This article is licensed under the GNU Free Documentation License and it uses material from the Wikipedia article "Mobile virtual network operator.