How Mobile Network Operators (MNO) and MVNOs operate

Mobile phones are essential telecom equipment that most of us use every day for a variety of things. Buying a mobile phone subscription has never been easy, and there are plenty of options, including online and retail stores to buy a SIM card and phone to get you started. As a customer, we have many choices in terms of the device we want (e.g. a smartphone), contract duration (e.g. pay monthly or prepaid) and the monthly allowance (e.g. calling minutes, text messages, amount of mobile data). There was a time when a mobile phone subscription could only be offered by our regular cellular service providers such as Vodafone, Verizon, T-Mobile etc. But now, even supermarkets like Walmart, ASDA and Tesco have their own branded SIM cards, which can connect you to the mobile network just fine. Do you wonder how they do that considering it’s not their primary business, so how are they making your phone connect to a mobile network? If you have questions like these, you have come to the right place. The answers to these questions require you to know two terminologies: Mobile Network Operators (MNO) and Mobile Virtual Network Operators (MVNO). Let’s dive into these terminologies to find our answers.

A Mobile Network Operator (MNO) is an operator that owns a complete mobile network, including a mobile radio network (e.g. cell towers); A Mobile Virtual Network Operator (MVNO) is an operator that does not own a radio network and buys radio network capacity from an MNO to connect their customers.

What is a Mobile Network Operator – MNO?

Mobile Network Operators or MNOs are the companies that own a mobile network and have cell towers mounted in every location in a given town or city to provide nationwide cellular coverage. These include companies like Vodafone, T-Mobile, Verizon, AT&T, Telefonica, Airtel, China Mobile, Etisalat, Orange and many others. An MNO is a company that invests in mobile networks, which they purchase from telecom network equipment vendors like Ericsson, Alcatel-Lucent, Huawei, Nokia Networks etc. Mobile Network Operators are also called Mobile Network Carrier or just Carrier. These are the companies that buy frequency spectrum (carrier frequencies) from local regulatory authorities, e.g. Ofcom in the UK, FCC in the US to operate the network. MNOs own the cell towers, also known as base stations, that form part of the mobile radio network that can operate at the carrier frequencies purchased by the MNOs. That is how an MNO creates cellular coverage in any geographical location to connect mobile phone users to the mobile cellular network. Their services can include voice calls, text messages (SMS), picture messages (MMS), mobile data, international minutes & texts, roaming and other similar services.

What is a Mobile Virtual Network Operator – MVNO?

Mobile Virtual Network Operators or MVNOs are companies that do not have their own radio network. Instead, they buy radio network capacity from Mobile Network Operators (MNOs) to run a mobile service. MVNOs do not own cell towers or base stations, but they may or may not own the rest of the mobile network architecture to run their cellular services. To be clear, a mobile radio network is one of the most expensive resources that MNOs deploy throughout towns, villages, cities and highways to reach customers. An MVNO essentially piggybacks on an MNO’s radio network (cell towers) so that they do not have to buy the base stations and frequency spectrum to create cellular coverage. Depending on much control the MVNO wants, they may decide to become a light-touch MVNO (a reseller), a full MVNO with their own mobile core network, billing & charging, branding, sales channels etc. An MVNO can also decide to become someone between a full MVNO and a reseller. Irrespective of which model they choose, the cellular coverage of an MVNO always depends on which MNO’s mobile radio network they are using. For example, Tesco Mobile is an MVNO in the UK that uses Telefonica O2 (MNO)’s radio network.

Cellular coverage – MNO and MVNO

Since mobile communications technology is based on wireless mobility, mobile network operators (MNOs) use radio waves to transmit their cellular signals from base stations to the mobile phones and then back from mobile phones to the base stations. Mobile operators run their network in a secure way and employ licensed frequencies for transmitting and receiving the signals. If a mobile network operator (MNO) does not install its base stations at the right places in a given geographical location, customers cannot get proper cellular coverage. MNOs have an extensive network of macro, micro and small cells throughout towns and cities within a country to provide nationwide coverage. They also have roaming agreements with partner MNOs in other countries (either directly or through an aggregator) so that when their customers travel to those countries, the partner MNOs can keep them connected.

How do mobile network operators work?

Multiple mobile network operators can co-exist in a country, and they are all required to purchase licensed frequency spectrum from local regulatory authorities. In the UK, the regulatory body that issues the frequency spectrum to mobile operators is called Ofcom, but other countries have their own regulatory authorities generally controlled by the government. The frequency spectrum is a scarce resource for mobile network operators, and they must use it wisely and efficiently to get the most value out of it by providing good indoor and outdoor cellular coverage to customers. The frequency carriers or channels from the overall frequency spectrum are assigned to the radio units within mobile operators’ radio networks. The cellular coverage is created by transmitting and receiving radio signals between the base station and the mobile phone at these frequencies. Mobile operators procure the different network components, for example, the radio network, mobile core network, backhaul/transport, operations & maintenance system, billing & charging etc., generally from telecom network equipment vendors.

Mobile operators (both MNO and MVNO) sit between the customers and the network, and they understand the customer need. They use that information to create bespoke products, propositions and services to cater to a variety of use cases for customers. They run the mobile network as smoothly as possible to offer connectivity and other inter-related services to their customers. Mobile network operators usually have several sales channels, including retail and online shops, partners & resellers and account management teams (for B2B sales). The size and region of a mobile network operator can also impact how they function. For example, in Europe, many large mobile operators have a Group entity, usually in the country of origin (e.g. Deutsche Telekom, Vodafone Group, Telefonica, etc.) and local presence in different countries in the form of operating companies (e.g. T-Mobile Germany, Vodafone UK, O2, etc.). The operating companies are abbreviated as OpCo. Depending on the company and the product; there are also different levels of collaboration between Group and OpCos to create successful products in the most efficient way. Generally speaking, customers buy their mobile products and services from their local OpCos.

As a customer, it is your choice if you want to become a customer of a Mobile Network Operator (MNO) or a Mobile Virtual Network Operator (MVNO). They are different entities and offer you more options in terms of buying a mobile subscription, mobile phone, gadget insurance etc. Many MVNOs target various customer segments to provide specialised services to a specific niche. For example, as a customer, I have used Lycamobile in the past because they offered low-cost international minutes to the countries I was interested in. So, there are pros and cons to both, and you as a customer should do your research to determine your needs before getting into a contract.

Conclusion

A Mobile Network Operator (MNO) is a type of mobile operator that owns a complete mobile network, including the radio network (including but not limited to cell towers or base stations). A Mobile Virtual Network Operator (MVNO) is a type of operator that does not own a radio network and instead buys radio network capacity from a Mobile Network Operator (MNO) to connect their customers.

Here are some helpful downloads

Thank you for reading this post, I hope it helped you in developing a better understanding of cellular networks. Sometimes, we need some extra support, especially when preparing for a new job, studying a new topic, or maybe just buying a new phone. Whatever you are trying to do, here are some downloads that can help you:

Students & fresh graduates: If you are just starting, the complexity of the cellular industry can be a bit overwhelming. But don’t worry, I have created this FREE ebook so you can familiarise yourself with the basics like 3G, 4G etc. As a next step, check out the latest edition of the same ebook with more details on 4G & 5G networks with diagrams. You can then read Mobile Networks Made Easy, which explains the network nodes, e.g., BTS, MSC, GGSN etc.

Professionals: If you are an experienced professional but new to mobile communications, it may seem hard to compete with someone who has a decade of experience in the cellular industry. But not everyone who works in this industry is always up to date on the bigger picture and the challenges considering how quickly the industry evolves. The bigger picture comes from experience, which is why I’ve carefully put together a few slides to get you started in no time. So if you work in sales, marketing, product, project or any other area of business where you need a high-level view, Introduction to Mobile Communications can give you a quick start. Also, here are some templates to help you prepare your own slides on the product overview and product roadmap.

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