IMS and Virtual Network Operators (VNO)

At MobileIN.com we believe that there are new business models to be explored since new technologies will enable new entrants to offer robust data and content services to end users with little or no infrastructure investment by serving as Virtual Network Operators (VNOs). New business models based on the effective distribution of content across multiple networks and integrated with personal, customized services generates many varieties of VNOs with more range and scope than traditional “Resellers” or “MVNOs” presently in the industry. Convergence is alive and well in wireless and wireline networks. It is further pushed by the expanding competition focused between networks and also from new service provider models such as the national MVNO who are competing using national brand names.

These direct benefits from the promotion of Service Delivery Platforms to a higher position in the network hierarchy open the door for an increasing role of alternate service providers. Characteristic of these alternate providers is their role in the customer relationship with no formal network infrastructure. Virtual Network Operators (VNOs) create business value on the merits of a collection of services and features offered to customers on a subscription basis and offered through the distribution of the wireless and wireline network infrastructure providers.

The improved interfaces with billing and OSS platforms along with SIP-based applications will enlarge the overall services market allowing greater entry for new independent developers. Multi-network service providers and VNOs will have new distribution channels for their content and services.

• SIP-based applications development expands the size of the feature market for everyone.

• The position of independent developers and VNOs using emerging service-hosting arrangements expands more than others.

The emergence of convergence and new IMS technologies will shape and reshape the strategies of industry participants across the mobile and fixed-line industries. Due to the flexibility of the technology and shifting trends on customer behavior, one type of market player in particular, the Virtual Network Operator or VNO, is developing as an interesting business model. As a result of many shifting market influences, the presence of these VNOs will lead to new battles for control of the mobile customer.

Virtual Network Operators are the most recent step in the evolution of the wholesale element in the wireless industry. The progression of this class of operator in the mobile space has evolved over the years once network coverage became national and national brand names have entered the space. Some elementary data content has also been made available in the latest offerings. The below table compares some of the main traits marking the advancement of Resellers and MVNOs with the trends for future VNO operators:

	Mobile Reseller	Mobile Virtual Network Operator - MVNO	Virtual Network Operator - VNO
	1990’s	2000’s	2010
Geographic Scope	Regional	National	National
Business Model	Wholesale purchase of discounted bulk MOU capacity; resell consumer voice usage; profit on higher consumer margins	Wholesale purchase of discount bulk MOU capacity; usually targeted to promote a national presence with an already established Brand Name. Wireless offering is integrated with other Brand Name distribution. Examples: Disney, ESPN	Driven by technology that offers personalized services, more feature rich content across multiple networks and multimedia.
Customer Ownership	Reseller controlled wireless number, billing, customer care, and marketing	MVNO owns the customer relationship through marketing, billing and customer care functions, some of which are outsourced. Local Number Portability (LNP) reduces carrier’s hold.	Greater ownership of the customer with the mobile carrier more in the role of an outsourced vendor for the access network function. Wireless number ownership shifting away from mobile carriers to 3^rd party administrators.
Features	Reseller completely dependent on host carrier for all features and services (almost exclusively voice and voice mail).	Voice features are dependent on host carrier; also some superficial data content links to other Brand-related web content.	Overlap between mobile and internet networks for web and streaming content; same content delivered across multiple devices and multiple networks.
Other Offerings	Bundled offerings with other messaging services, i.e. paging	Cross marketing of other Brand Name content or products.	IMS platforms which provide personalized services and interaction between services, including presence and location-based services.