1112 symsoft mvne white paper

7/28/2019 1112 Symsoft MVNE White Paper

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White paper

December 2011

www.symsot.com

MVNe SerViCe DeLiVerY

When to buy solutions and when to lease serv ices


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3December 2011

exeCutiVe SuMMarY

The Mobile Virtual Network Operator (MVNO) business model oers an attractive way to quickly launch

new mobile brands in the marketplace. Market oriented companies can capitalize on existing market

knowledge and customer relations by adding mobile services without the need to build a new mobile

network. Instead, MVNOs rely on services and support oered by established mobile network operators

(MNOs) and Mobile Virtual Network Enablers (MVNEs).

To be successul in the role as an intermediary between MNOs and MVNOs, MVNEs must balance the needs

o the two parties and meet both their expectations accordingly.

A key expectation of the MVNO is typically to be able to ocus on commercial activities such as marketing,brand development and customer loyalty programs, leaving back-end enablement and operations to the

MVNE. To meet the demands rom MVNOs operating in dynamic, ast changing mobile environments, the

MVNE platorm and service oer will need to support rapid launch o new services; in new markets and

existing markets. A third key expectation rom an MVNO on its MVNE partner is the possibility to minimize

the initial investment along with a total cost o ownership (TCO), as a result o economies o scale.

MNOs on the other hand are likely to embrace the MVNO business model in an attempt to secure increased

usage in their mobile network. Doing this, the requirement will be to secure that new ventures have minimal

impact on the MNOs existing business and can be supported within established processes.

These two sets o needs have an impact on how the MVNEs choose to implement their service oer. Decidingwhat parts o the solution they are to buy and operate themselves and when to rely upon services provided by

the mobile operator partner is an important part o the service oer design.

MSC and HLR operations typically require a limited number o MVNO specic congurations. This means

that the MVNE can successully rely on the MNO services as a way o grasping the opportunity o economies

o scale. Requirements or fexibility and eciency on the other hand make it imperative or MVNEs to

provide online charging capabilities and business support systems. Dedicated messaging, mobile data and

customer interaction capabilities also strengthen an MVNEs position by enabling quicker launch in new

markets and quicker conguration o subscriber services.


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4 December 2011

the MVNe iN the MobiLe eCoSYSteM

As new Mobile Virtual Network Operators (MVNOs) are ormed all over the world, the market or Mobile

Virtual Network Enablers (MVNEs) is growing. The role o an MVNE is to provide services such as

provisioning, administration, operations, business and operations support systems to MVNOs to enable

them to oer mobile network services. In this way the MVNO is able to ocus on its core strengths in terms

o brand development, customer loyalty and marketing, leaving back-end enablement and operations to the

MVNE. As an intermediary between mobile network operators, running the underlying mobile network, and

MVNOs, MVNEs can realize signicant economies o scale. The result is an operation that is oten both more

comprehensive in terms o unctionality and more cost-ecient than what can be achieved by an individual

MVNO.

Success as an MVNE depends on a number o strategic decisions. One o the most signicant decisions with

long-reaching consequences is choosing what components o service delivery to handle directly as an MVNE

and where to rely on existing mobile network operator services.

On one hand, separating the operating systems rom mobile network operators platorm enables MVNEs

to oer increased fexibility serving their MVNO customers. On the other hand, reusing an existing

inrastructure is a key mean or minimizing the initial investment as well as recurring costs o ownership. A

third aspect might be the perceived benet among MVNEs to minimize the number o suppliers, decreasing

business complexity.

This white paper will discuss the MVNE strategic buy-or-lease decisions rom three dierent angles:

Whatcriteriacouldbeusedfordrawingthelinebetweenwhatsolutionstobuyandwhattoleaseasa

service?

Asaresult,whatservicedeliverycapabilitiesshouldanMVNEconsideroperatingthemselvestomaximize

fexibility and eciency and what resources are best outsourced to a mobile network operator partner?

WhatdemandsshouldanMVNEputonthedifferentelementstheyusetodeliverservice?


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5December 2011

the baLaNCiNg aCt of the MVNe

For MVNEs to be successul in the role as intermediaries between mobile operators and MVNOs they need to

add value. How this value is added varies between dierent MVNOs and mobile operator partners. However,

it is typically based on the MVNEs superior market knowledge and established position in the value chain,

in combination with being more technology savvy than the served MVNOs and the ability to lower the initial

investment and shorten time-to-launch or new MVNOs.

SerViNg MVNosMVNEs build their success on helping MVNOs succeed in the mobile market. It is thereore o paramount

importance to understand and meet the needs o these MVNOs.

Small initial investmentAs with most companies entering a new business, MVNOs generally seek to minimize their initial investment.

Thereore, they oten preer to let other actors own and operate technical inrastructure.

Marketing exibility

MVNOs as market oriented companies are oten strong in identiying and targeting specic market segments.

They depend on their MVNE and MNO partners to provide them with tools to create attractive products

and campaigns. It is o importance that these tools are as fexible and adaptable as required to secure market

agility.

Short time-to-market

Short time-to-launch or a new MVNO gives the ability to react more switly to opportunities arising in

dierent markets. This extends both to launching services in entirely new markets as well as quickly rolling

out new oers and campaigns in existing markets.

Inormation integrity

As any business MVNOs have an interest in protecting their inormation, be it customer data or details o its

services, products and campaigns. When MVNOs manage inormation using systems owned and operated by

others, they have to know that their inormation is protected and not in any way shared with other MVNOs.

Operational know-howMVNOs oten ocus on the market side o the mobile service business. As such, they oten lack deeper

technical knowledge and awareness about the possibilities with the services they oer. Thereore, they rely

on their MVNE partners to provide them with understanding and guidance in relation to the services that

they oer. Thereore, they rely on their MVNE partners to provide them with understanding and guidance in

relation to the services that they oer.


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6 December 2011

MeetiNg MobiLe operator requireMeNtSMobile operators interest in an MVNO/MVNE business model is mostly associated with an existingovercapacity in the operator network. Sub-leasing mobile services to a third party rather than promoting

those more aggressively directly to the market can be a way o avoiding cannibalization o an establishedoperator brand. For mobile operators, partnering with MVNO players can also represent an opportunity o

tapping into new market segments, with specic demographics or go-to-market models.

As the provider o mobile network access, the mobile operator becomes a key partner or MVNOs and

MVNEs. This in turn makes it important or MVNEs to meet the requirements o mobile operators to

assure a stable, mutually benecial, relationship.

Conormance to existing processesTo secure stable operations and qualitative service delivery, most established mobile operators haveelaborate processes to handle changes to their systems. Compliance with these processes is generally

required rom MVNEs and other parties that connect to the operator network.

Minimal impact on operator trafcThe trac subleased rom the mobile operator to an external MVNO/MNVE partner is typically a marginal

part o the mobile operators overall business. It is thereore important that new initiatives, such as MVNOs

operating on their network, do not aect the operators current business and customers adversely.


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7December 2011

proCuriNg MVNe SerViCe DeLiVerY

SoLutioNS

The needs o MVNOs and the requirements o mobile operators both have implications or the procurement

o MVNE inrastructure. They both infuence the scope o unctions to be oered by the MVNE and

infuence the requirements on each specic component o the solution.

DeterMiNiNg SCope of MVNe iNfraStruCtureThe rst question to answer when analyzing solution needs or an MVNE is the unctionality scope, i.e.

what unctionality the MVNE should provide and to what extent it should rely on the capabilities o mobile

operators.

Two partly opposing interests come into play when determining scope. On one hand, MVNEs want to give

their MVNO partners the highest degree o fexibility, service quality and inormation integrity. On the other

hand, it is desirable to maximize economies o scales and optimize cost-eciency to improve bottom-line

results.

MVNEs can generally maximize MVNO value by operating their own systems or service delivery, rather

than relying purely on existing mobile operator solutions. When unctionality is implemented directly by the

MVNE, administration and conguration is also decoupled rom the processes o the mobile operator. This

decreases time-to-market or MVNOs and improves control o services and MVNO inormation.

At the same time, the mobile operator generally has a larger number o subscribers and can thereore create

better economies o scale. By using spare network capacity the marginal cost or adding more subscribers isusually relatively small.

Striking the balance between MVNE-based and operator-based solutions is thereore a question o identiying

unctions or which the value o the fexibility oered outweighs the cost o operating a system separately.

Each business case and each partnership between MVNEs, MVNOs and mobile operators is unique. Still,

some general guidelines can be used when making system investment decisions:

Fornetworkelementswithalimitedneedforcustomer-speciccongurationorsystemsthatare more

rarely changed once in operation, relying on mobile operator systems is typically preerred to increase

operational eciency. MSCs and HLRs are important examples o such elements.

Forelementsresponsibleforservicedeliverythatrequirechargingintegration,itisgenerallybesttokeep

them in the MVNE network. Managing standardized trac protocols instead o integrating with operator-

specic charging protocols allows MVNEs to quickly connect to new mobile network operators.

ForelementsthatneedtobeconguredforeachMVNO,MVNEsaretypicallybetteroffoperatingtheir

own equipment to retain fexibility, data integrity and availability towards MVNOs.

ForbusinesssupportsystemsandCRMclosetotheoperationsoftheMVNO,thedivisionof

responsibility between the MVNE and the MVNO vary rom case to case. For MVNOs that already have

established customer relationships (e.g. retail chains), it may be preerable to extend certain parts o BSS

and CRM inrastructure in the MVNO to provide a unied interace towards end customers.


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8 December 2011

requireMeNtS for SpeCifiC CoMpoNeNtSFrom these general rules, elements suitable or MVNE operation can be identied along with the needs toconsider when procuring them. This section will investigate how separating these elements can make MVNOs

more competitive in the market, and the demands put on them.

Online Charging SystemOnline Charging System (OCS) manages rating and charging or all services oered by an MVNO. It handles

pricing, packaging and service control, all crucial to marketing mobile services. Operating a separate MVNE-

based OCS gives MVNOs the ability to act quickly in the marketplace, without the need or a hosting mobile

operator to recongure its systems.

To support MVNOs in making the most o their business, it is essential that MVNEs use an OCS solution

that enables fexible creation o products and campaigns. To give MVNOs the agility they need, it is alsoimportant to choose a charging system that supports multi-network and multi-country

SMSC/MMSCSMS and MMS are today important services or practically all actors in the mobile market, adding signicant

revenues to basic voice services. Operating separate solutions or service delivery simplies integration with

mobile network operators. Instead o adapting the OCS to the specic charging protocols used by the MNO,

standards-compliant trac fows can be rerouted to the MVNE inrastructure without operator-specic

adaptations.

By operating dedicated SMSC and MMSC nodes, MVNEs can better guarantee service quality and oeradvanced messaging unctionality.

To ully simpliy integration, it is valuable to choose SMSC and MMSC solutions that are prepared or

integration with the chosen OCS. As messaging services are still evolving, it is also o value to work directly

with vendors with experience in this eld.

PGW/GGSNThe Packet Data Network Gateway/Gateway GPRS Support Node (PGW/GGSN) is an important enabler

or mobile data services, and there are several reasons or operating it outside the operator network. In the

GGSN case, redirecting the trac fows to the MVNE simplies charging integration. Instead o integrating

with operator-specic charging protocols, the MVNE only has to integrate with well-dened trac protocolssupported by most GGSNs.

With ull control over its conguration, it is also possible to quickly create advanced data services with access

to content and services not accessible over the Internet, as well as allowing regular Internet access.

The requirements on the PGW/GGSN depend on the nature o the subscribers that an MVNO seeks to

target. For MVNOs primarily interested in oering low-cost/low-price basic data services, relying on the

mobile operator PGW/GGSN might be the best option. However, MVNOs that seek to create more advanced

oerings and use mobile data services as a market dierentiator can increase fexibility and shorten time-to-

market signicantly with an MVNE-operated PGW/GGSN.


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Voicemail, IVR and USSDMVNEs can provide a better service to MVNOs by operating subscriber-acing systems such as voicemail,

IVR and USSD. Operating these systems ensure that MVNO customers can set up their services quickly

without having to handle sometimes complex processes in the network operator.

Business Support SystemsThe ability to control Business Support Systems (BSS) is important to all providers, especially customer-

oriented MVNOs. Although the technical requirements are oten less demanding than or MNOs, relying on

mobile operator systems would still introduce delays when updating BSS capabilities and conguration.

Customer Relationship ManagementCustomer Relationship Management (CRM), i.e. the long term handling o all subscriber relations is a

undamental part o the market-driven MVNO business. To be able to satisy subscribers, MVNOs must begiven access to versatile CRM tools or interace to extract and modiy inormation rom the MVNEs.


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10 December 2011

SuCCeSS StorY: SiMfoNiCS

orCheStratiNg aN MVNo SYMphoNY

In spring 2006 two experienced executives rom the mobile operator business ounded Simonics, an

international Mobile Virtual Network Enabler (MVNE). The vision was to acilitate the establishment o new

Mobile Virtual Network Operators (MVNOs) around the world by oering all key services needed under a

managed service business model.

The Simonics ounders went in search o an MVNE platorm that would be instrumental in realizing the vision.

The objective was to nd a solution that would let Simonics oer all key services needed by new MVNOs rom

one integrated platorm, independent o the underlying operator network.

Ater a thorough evaluation process and in-depth discussion with leading telecom vendors, charging and

messaging expert Symsot was selected as the most suitable candidate. Today, the Symsot MVNO platorm

provides the basis or a true multi-tenant solution where each o the Simonics customers business is securely

managed in a dedicated partition. Oering GSM services, prepaid and postpaid charging, SMSC, MMSC, IN

routing and voucher management rom one integrated service delivery platorm provides a number o business

benets to Simonics and their customers.

foCuS oN totaL CoSt of oWNerShipSimonics customers pay or the service based on their usage, without any upront technology investment. In

this way businesses that start out small get access to a cost-ecient, ull service portolio rom day one. Tapping

into the Simonics MVNO managed service concept also means that costs and sta related to administration

and management o the solution can be kept to a minimum.

- Symsots integrated approach lets us oer cost-ecient services, without compromising on unctionality or

quality. Being able to manage a number o MVNOs rom one administrative platorm urther strengthens our

nancial case, explains the Simonics co-ounder and now CEO Uwe Lhrig.

reDuCiNg tiMe-to-MarketAnother benet o oering services rom an integrated platorm is the possibility to cut time-to-market. With

the managed MVNO platorm Simonics have assisted new MVNO-based operators rom initial planning to

commercial launch in only three months. The fexibility o the service delivery platorm also allows or new

service oers and campaigns to be created in minimal time.

- The MVNO platorm we have chosen gives us the fexibility we need to support our clients in launching new

services and developing their market oers with competitively short time-to-market, explains Mr. Lhrig.

Since the beginning in 2006 Simonics have supported more than 10 new MVNO businesses around Europe:

rom business case development, concept testing and business processes denition to solution integration and

commercial launch.


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SYMSoft Your MVNe aND MVNo

partNer

ChargiNg aND MeSSagiNg expertSSymsot specializes in charging and messaging solutions or mobile operators globally, enhancing their

competitive positioning and enabling them to embrace new revenue opportunities.

Our integrated solutions or MVNEs and MVNOs include all components needed to eciently build and

run a mobile business including online charging, mobile data, messaging services, enterprise messaging,

voice mail services and solutions or end user sel management and voucher management. All elements are

designed or hosting outside the operator partners inrastructure while being ully integrated to the leased

services in the underlying mobile network.

oNe pLatforM MoDuLar CoMpoNeNtSSymsot MVNO solutions are designed to support MVNEs and MVNOs in a dynamic, ast changing mobile

market. The complete portolio is based on a single platorm to simpliy operation and maintenance. A

common administrative client can be used to access settings and inormation or all unctions and services.

The modularity o the solution allows or easy tailoring to individual MVNO requirements, whether it relates

to charging or value-added services. Once installed, the solution is easily extended with new unctionality in

parallel with already installed applications. The system scales linearly to handle uture subscriber growth in a

cost-ecient manner.

a proVeN CoNCeptWe have over 20 years o experience in helping MVNOs and MVNEs to succeed in the mobile marketplace.

Our MVNO/MVNE solutions have been implemented and veried with network elements rom all major

vendors, making them well prepared or integration with mobile operator networks. With a strong product

portolio, an intimate knowledge o telecommunication networks and applications, and a proven track

record, Symsot is a reliable partner or MVNEs and MVNOs wanting to succeed in a ast-moving market.


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Symsot is a trusted charging and messaging expert

with over twenty years o industry experience. Symsot

provides solutions enabling operators globally to stay

ahead o their competitors in an increasingly competitive

telecom market. Its innovative products are used by

leading operators such as America Mvil, Millicom,Polkomtel, Saudi Telecom, Telenica, Telenor, Tele2,

TeliaSonera and 3 in more than 30 countries, serving

over 120 million subscribers.

www.symsot.com

Middle East & Arica

Symsot MEADubai Internet CityP.O. Box 500649Dubai, United Arab EmiratesTel +971 4 36 16 637

Americas

Americas Symsot Inc.5700 Granite Parkway,Ste 200Plano, Texas 75024, USATel +1 972 731 6708

Corporate HeadquartersSymsot ABKista Science TowerFrgatan 33, PO Box 1219SE-164 28 Kista, SwedenTel +46 8 566 166 00

Asia PacifcSymsot Asia Pacifc9 Temasek Boulevard#31-02 Suntec Tower TwoSingapore 038989Tel +46 8 566 166 00

20 S AB All i h d

1112 symsoft mvne white paper

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