Extracted from Chapter 9 of the Telecom 101 reference book. Note: acronyms and abbreviations used below are explained in lessons leading up to this one.
9.7 Mobile Operators, MVNOs and Roaming
9.7.1 Mobile Network Operator
Mobile Network Operator (MNO) is the term
usually used to refer to a facilities-based carrier, i.e. a company that owns
base stations, a mobile switch, backhaul between them, and spectrum licenses,
and sells services to the public… and to other carriers.
The MNO implements external links to other
carriers for PSTN phone calls and for Internet traffic.
For PSTN phone calls, the MNO implements a
fiber optic connection to a building traditionally called a Toll Center or
Class 4 switching office. The termination of their fiber in that building is
called a POP. It is their physical point of presence in the building.
Many other carriers have POPs in the
building, including the ILEC, IXCs, CATV companies, other mobile carriers, and
any other company that wants to connect phone calls to a phone on the MNO’s
The operator of the toll center, usually the
ILEC, provides a switch in the Toll Center to switch phone calls from one
carrier’s POP to a different carrier’s POP.
For Internet access, the MNO implements a
fiber optic connection to one or more Internet Exchange buildings, where they
pay the operator of the IX to route packets to other carriers with whom the MNO
has established IP packet transit and peering arrangements.
9.7.2 Mobile Virtual Network Operator
Mobile Virtual Network Operator (MVNO) is the
term used to refer to a non-facilities-based carrier… one that does not own
the hardware or spectrum licenses or POPs.
Instead, the MVNO enters into a long-term
contract with one or more facilities-based carriers to have them supply a
“white label” service that the MVNO sells.
Typically the MVNO will develop a unique
branding and sell smartphones and tablets to go along with its service.
When the MVNO deals exclusively with one
carrier, the MVNO bill to the customer would be typically generated by the
facilities-based carrier as a white-label service.
If the MVNO is very large and deals with
multiple carriers, the MVNO may operate their own billing system, which is a
The facilities-based carrier charges to the
MVNO includes a volume-discount rate for IP addresses and Internet traffic,
voice-minute airtime and switched access to the POP for PSTN phone calls.
The MVNO also has to pay for connectivity
from the POP to other toll centers for “long-distance” connections,
and the switched-access charge at the far end.
The rate plan the MVNO pays could be a mix of
fixed-rate leases and usage-based billing.
Unless the MNO is obliged to sell capacity to
MVNOs through regulations and tariffs, the nature of the plan is confidential
Roaming service is very similar to the
service provided to MVNOs, in that it is the MNO that is providing the airlink,
base stations, backhaul, mobile switch and connections to the PSTN and
In the case of roaming, the visitor uses
their own phone, and billing is usage-based.
Roaming is an important feature for smaller
players: they are facilities-based in selected cities, but to offer a national
and international service to their customers, they must have roaming agreements
in place with MNOs in other locations.
By denying roaming service to smaller or
startup carriers, or charging an exorbitant price for roaming, an incumbent
carrier can erect a barrier against competition.
In many countries, the right to roam and the
wholesale cost of roaming is regulated to encourage competition.
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