Business Model Case Study

Mobile Virtual Network Operators in US: A Business Model under Scrutiny

OR

Abstract:
(MVNOs) mobile virtual network operators have been a recent phenomenon in the wireless telecommunications sector. Changing customer expectations, personalisation and the saturation of wireless markets has put pressure on the traditional network operators to share their network capacity to deepen market access. The relationship between MVNO and MNO (mobile network operators) is paradoxical in nature as the MVNO depends upon the host operator for the network and at the same time complements its services. Increasing competition and fast changing technology trends are making the landscape for MVNO more and more attractive. But the business model of MVNO is fraught with weaknesses. A strong execution and programme management discipline is important for any MVNO to succeed. The case highlights the importance of a robust business model for a MVNO by way of illustrations of MVNOs which have succeeded and those which have failed.

Pedagogical Objectives:

• To understand the reasons behind the MNO and MVNO partnership.
• To discuss the various business models which an MVNO can adopt.
• To identify the key success factors required for a MVNO to succeed.
• To understand the opportunities available to evolve into the next generation MVNOs.

Keywords : Virgin Mobile; Business model; Mobile network value chain; Network consolidation; Critical mass of subscribers; Average revenue per user; Network capacity; Economies of scale; Brand image; Prepaid and post paid market; Niche marketing; Market differentiation and segmentation; Cross-selling; Convergence; Mobile virtual network enabler