Can MVNOs cope with a data explosion?

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By Nick Ballard, director of mobile, Geo Networks

The surge in the use of smartphones, tablets and dongles have pushed mobile data volumes through the roof and this rise shows no signs of abating. According to the Yankee Group, a research and advisory organisation, data growth will ramp up sharply by at least 30 times in the next four years. This significant increase will put severe pressure on an operator's air interface as well as its fixed backhaul and core network infrastructure.

Mobile virtual network operators (MVNOs) are also feeling the weight of this shift in usage and behaviour. They rely on their host operator's networks to remain competitive. Although mobile and wireless operators have been running their core networks over fibre for some time, many are now considering new ways to enhance their investment by extending the fibre into the aggregation/backhaul layer.

Trumping the competition 

The customers of successful MVNOs should not be able to distinguish them from mobile network operators (MNOs) when it comes to service and performance. They will, however, see benefits in terms of value and the sense of community. In contrast to resellers, who offer very little brand recognition, MVNOs are primarily mainstream brands with a visible market presence and marketing influence. A good example is Tesco Mobile, a UK-based MVNO that uses its market recognition and presence on the high street to position itself as a telco for selling directly to its customer base.

While MVNOs do not typically own their own physical infrastructure, some major providers are now choosing to invest in both fibre optic networks and capacity services. This means that MNVOs will commonly treat the host MNO's infrastructure as a means to an end, offering its own special blend of products and differentiated services through the exploitation of their own intelligent network infrastructure. MVNOs do this to enable them to offer innovative promotions and services to their customer base, commonly an ethnic or special interest group. This avoids them having to compete with the MNO on price.

The rise of MVNAs

The other interesting development is the rise of the mobile virtual network aggregator (MVNA) such as Cognatel and x-Mobility. MVNAs aggregate demand from smaller MVNOs and purchase mobile airtime in bulk from a partner MNO, such as Vodafone in the case of Cognatel.

MVNAs provide the underlying systems, platform and value added services to multiple MVNOs, with the aim of reducing the overall operational cost. There is also a rising trend for larger MNOs to use an offshore MVNO so that they can offer clients the ability to consume data while overseas without incurring excessive roaming fees. This dual SIM approach makes sense as it ensures the MNO's proposition in their home territory is more attractive.

Tackling the issue 

With the popularity of video on demand services, such as YouTube or BBC iPlayer, the rise of data usage will continue. Faced with this challenge, many operators are likely to choose to own their own network with dedicated fibre infrastructure. This is good news for mobile customers who will see their expanding media habits met with unremitting connectivity and fast download speeds.

Geo Networks is a provider of high performance fibre networks for demanding data users.

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