Origin, theory, implementation and future of MVNO

In recent years, the term MVNO, an abbreviation of Mobile Virtual Network Operator
is becoming famous in India. As like all other technologies and practices, this also
made its entry late into India. At present, it is one of fast growing market strategy in
telecom sector.

Objective of this document:

The main objective of the document is to have a wide view about MVNO
concept from technical point of view. It also has some light on the business area of
this successful concept. So readers can expect more technical data and descriptions
than non technical discussions.

What MVNO actually means?

As the abbreviation clarifies, MVNO stands for first letters of Mobile Virtual
Network Operator. Yes, it is a virtual mobile operator. Virtual implies for not having
any dedicated basic infrastructure for operation. They don’t have licensed frequency
bands, no base stations, no switching centres and no transmission media. Lot of
questions may arise for the reader such as, if a MVNO does not have these facilities,
then what else they own to run the business?
The answer is very simple. They have their own charging system, optional
HLR and optional Call centre. Among these requisites, charging systems are vital for
a MVNO. They purchase the airtime from the MNO (Mobile Network Operator) as
bulk and resell them according to the agreed tariffs with the actual MNO. Thus they
are also called as Mobile resellers. They can be literally compared to a parasite but
providing less favour to the host and in fact provide some indirect pressures also.
This business model, evolved in Europe had good response all over the world
including America, Australia and Asia. In spite of successful MVNOs, there were also
losers in countries like Singapore and Australia.

Origin of MVNO:
 Thanks to Sir Richard Branson, CEO of Virgin group. Virgin mobile launched
by virgin group is world’s first MVNO. It was launched in UK by 1999 and now it has
more than 40 lakhs customers in UK. It is really one of successful business strategy
of a successful business man, pioneering this business plan before everyone and
still continues to be market leader in MVNO. As of February 2009, there are over 400
active MVNOs operated by over 360 companies. Around 100 companies are
planning to make new ventures and about 72 brands run by various MNOs
pretending to be MVNOs.
Countries including Germany, Netherlands, France, Denmark, UK, Finland,
Belgium, Australia and US have the most MVNOs. In these countries the MVNO
marketplace is stabilizing and there are some well-known MVNO successes. Other
countries, such as Portugal, Spain, Italy, Croatia, Baltics, India, Chile, Ireland and
Austria are just beginning to launch MVNO business models.

Ideology behind the MVNO business model:

MVNOs can operate with any available technology like GSM or CDMA,
making them more resistant for market response. Another highlight feature of
MVNOs is they can set their own tariff plans subject to accommodating MNO. A
MVNO’s role and relationship to the MNO vary by market, country and the individual
situations of MVNO and MNO.
Even rMVNO (roaming mobile virtual network operator) is also available for
roaming services. In this type of service, a VLN (Visitor Local Number) will be
allocated for each country the subscriber visits. In this aspect, MVNOs are exploring
all possibilities to work with MNOs. Even well known MNOs are trying to declare their
own MVNO brands. Telia in Sweden operate a MVNO brand “Call Me”. Branded
MNVOs or BMVNO are also available like Virgin mobiles. The main difference is
more creative and customer orientation from BMVNO than ordinary MNOs.

Terminologies used:
There are several nomenclatures used in this field such as MVNO, rMVNO
and MVNE (Mobile Virtual Network Enabler). Out of them MVNO and MVNE literally
serve for similar cause and rMVNO alone differs significantly by providing roaming
service and transparency in international tariffs. MVNEs can be termed as
consultants that provide solution for a MVNO setup and operation.

Implementation:
 Let’s have an example of MVNO implementation. This is one of real time
implementation of MVNO. General conditions and assumptions are.

1. The MNO has both 2G and 3G network.

2. Name of MVNO is assumed as Sample and supports CAMEL Ph2.
3. Name of MNO is assumed as Host and support CAMEL Ph3+.
4. MVNO supports only prepaid subscriptions.
5. The MVNO has IN and charging systems, back office such as call centres
and customer centres only.
6. It does not have HLR, VLR and other switching infrastructure.
7. The SIM used is 32K 3G card compliant with GSM 11.11.
8. It shares same IMSI series of MNO but dedicated IMSI range.
9. It shares the HLR of MNO but with dedicated number series.
10. It uses the roaming operator agreements of MNO for outbound roaming.
11. MVNO is allowed to use only 2G network.
12. MVNO has to use own IVR platform.
13. MMS, 3G, call forwarding and call barring not allowed.
14. The MNO has twin STP configuration and all other network nodes are
connected with the STPs.
15. The MVNO has twin SCP with redundancy feature and in turn they are
connected to STP.
Link configuration:
1. 2 individual signalling links between two STP and two MVNO SCPs.
2. 2 individual E1 voice links between two GMSCs and two MVNO IVR nodes.
Signalling configuration is inevitable but does the voice link between MVNO
IVR and GMSC is necessary? – Yes, as per the configuration the MVNO
wants to play their own announcements and IVR content for subscribers so
they have customised IVR nodes. In order to play announcements, voice
circuits are needed and it should be connected to node that supports 64kbps
traffic. As MNO has two GMSCs namely GMSC1 and GMSC2, the MNO IVR
nodes are connected to MNO’s GMSC nodes.

Network diagram:
MNO

GMSC1 GMSC2

MVNO

Let us analyse the network structure and implementation one by one.

IMSI series: As mentioned earlier, the MVNO uses separate IMSI series with same
MCC and MNC values of MNO. In this example, IMSI series of Host is
12345xxxxxxxxxx and the allotted IMSI series of Sample is 1234512xxxxxxxx.
Abiding to standard IMSI structure of MCC-MNC-MSIN where length of MCC is 3,
MNC is 2 and MSIN is 10, it can be calculated that about 99999999 subscribers can
be added by Sample MVNO. As the first two digits of MSIN are fixed, the other eight
digits can only be used for subscribers. That’s reason for 99999999 (with length 8).
Practically, these much numbers are not allotted to customer as it involved
performance issues.

Signalling point SP: For every physical node a signalling point code is required.
Normally in redundancy configuration of STP or any other nodes that work in parallel
concept called “Alias point code” is used which has a common point code in addition
to existing two individual codes. In our case let the point codes be
2-2031 – MVNO SCP1, 2-2032 – MVNO SCP2, 2-2030 – Alias Point code
The standard format for signalling point is NI-SPC where NI is network indicator. In
sample case, NI has value as 2 that allow treating message in National format.

Global Titles GT: Global titles are address with international format that are used to
identify individual nodes. Normally GT will be unique for every operator and it has
same format of the number series of the network. In our project, we have only SCP
node that has signalling connectivity with the MNO network. List of GTs allotted are

1234xxx211- CAP_SCP1, 1234xxx212 – CAP_SCP2, 1234xxx210 – Alias GT

1234xxx311 – MAP_SCP1, 1234xxx312 – MAP_SCP2, 1234xxx310 – Alias GT
1234xxx111 – SC_SMS1, 1234xxx112 – SC_SMS2, 1234xxx110 – Alias GT

Usage of CAP GT is mandatory as the nodes are SCP nodes and they should have
them. There raises questions about the usage of MAP and SC_SMS GTs. The
MVNO supports CAMEL Phase 2 but in case if they require online charging for SMS,
then a new approach has to be made.

Online SMS charging for outbound roaming with CAP2 environment:

CAMEL Phase 2 does not support online charging for SMS and supports only for
voice. It can be achieved by using MAP for SMS management.During MO-SMS
scenario the short message will first reach MSC and MSC in turn delivers to SMSC.
Similarly during MT-SMS scenario, the SM is deposited in SMSC. It will interrogate
HLR for the current VLR of subscriber and route the SM to the subscriber. During MT
case, the SMSC will get “Routing Information request” to know the current VLR of
subscriber. With the response of the request, the current location can be identified
and charging can be made accordingly.
Similarly for MO case, the MAP message will have the originating MSC address that
can be used for online charging.

Due to this reason, the MVNO is allotted around 9 GT addresses. It’s up to the
hardware configuration of MVNO so that the usage of 9 GT can be properly planned
and utilized.

USSD service codes: Being MVNO, the main focus is to have customized user
interface for customers. In sample project, the USSD services are handled by a
dedicated USSD gateway at MVNO end. As USSD uses MAP layer for all
transactions, the same MAP GT is used for USSD routing.
Definitions to be made in HLR:
1. The numbers allotted for MVNO has to be defined with proper IMSI.
2. The numbers should be defined with proper trigger data such as service key.
The service key is like additional data to access a database.
3. USSD service codes for MVNO has to be defined with the USSD gateway
address as alias MAP address 1234xxx310.
4. Proper trigger for MO and MT has to be defined with actual GT address.
5. Global title for MAP messaging should be defined.
Definitions to be made in MSC:
1. Short codes for IVR and customer care should be routed through the voice
trunks from GMSC and IVR nodes.
2. All 9 Global titles address has to be defined and routed to STP.
3. As IMSI series is same as that of MNO, no special IMSI definition required.
4. As both MO and MT have triggers, no specific definition is required in
MSC. But based on vendor type, the mentioned definition varies. In case
of Ericsson no detailed definitions needed for CAMEL. For other vendors,
it is necessary and also enables extended control.

Interesting facts about MVNO:

1. On one side, MVNO helps to utilize the radio resource of MNO more
effectively. On other side, they also tend to be competitor for MNO.
2. MVNO can fix tariffs only after approval from MNO.
3. First MVNO is Virgin in UK.
4. In India, first MVNO was by Virgin group and it used TTSL (Tata Tele Services
Ltd) resources.
5. Many other MVNO such as Lycatel are entering Indian market.
6. MVNO concept was failure in Singapore after 9/11 terror attacks.
7. Oman has launched the region’s first MVNO. Frendi mobile uses
OmanMobile’s infrastructure.
8. Even MNO of some countries are thinking of launching own MVNO brand
both inside their territory and overseas.
9. As per report, about 89 fresh MVNO launches are getting ready for 2009.
10. Due to MVNO, the competition gets tough and operators are forced to slash
prices.

This document deals more with circuit related traffic and has very little or no
information on data traffic like GPRS and EDGE for MVNO subscribers. The
document is based on real implementation with values changed.

For additional information, questions and comments,

Ramanathan Sundaram
xpotentialram@gmail.com
First Copy – 29-06-2009

Additional references:
http://en.wikipedia.org/wiki/MVNO
http://www.littlespringsdesign.com/blog/blog/2007/10/30/mvno-failures/
http://en.wikipedia.org/wiki/USSD_Gateway
http://www.mvnodirectory.com/index.html
http://www.itu.int/itunews/issue/2001/08/mvno.html
http://www.sim2travel.com/product/overview.asp
http://www.perlegos.com/services/services.htm
http://www.funsms.net/sms_tutorial.htm