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What is a virtual mobile network?

A mobile network operator is a telephone company that provides services for mobile phone users. Such services include allowing their customers to make voice and videos calls, send SMS messages (texts) and MMS messages (picture messages) and access the internet. The difference between a virtual network operator (such as Giffgaff) and and regular mobile network (such as O2) is that a mobile virtual network operator does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone services.

Mobile telecommunications

This means that they don’t need to have acquired a radio spectrum license from government agencies before they can provide a mobile phone service on the airwaves within a country. They also don’t need to deploy essential equipment in order to offer the services, most notably the radio transmitter network and the core network. Instead, they lease or resell from existing operators. This means that they don’t have as high overheads but they can still set their own pricing structures and rate.

Free SIM cards, PAYG or contract, unlimited text deals

Most virtual networks are Pay As You Go (PAYG) only and some offer contracts. However, they still give out free SIM cards and have offers that provide unlimited texts for a certain price. Others even have the option of unlimited data or unlimited calls. The benefit of not having as high overheads mean that virtual networks are often the cheapest PAYG option in the UK.

Best UK virtual mobile networks

There are several virtual mobile networks available in the UK. Following are some examples of the most popular ones:

Virtual operators

Also, don’t rule out the main mobile operators that don’t run virtual networks. Some of the best mobile networks are not virtual networks.

History

The emergence of virtual networks in a market is often a result of one of two factors. Regulatory intervention designed to lower the barriers for market entry and ultimately increase competition, or a strategic decision by an existing operator looking to extend its existing operations and target niche or undeserved segments through a second or perhaps multiple brands.

The efficiency is obtained by the nature of the business model, in that, virtual networks don’t incur significant capital expenditure on spectrum and infrastructure. It also does not have the time-consuming task of rolling out extensive radio infrastructure. Furthermore, many mobile network operators believe that there is merit in operating a virtual network, to complement their retail model.

Understanding the MVNO value chain

Mobile network operator (MNO)

The traditional MNO is characterised by having their own mobile licence, their own mobile infrastructure and direct customer relationship to the end user. The MNO can handle Network Routing and will usually have roaming deals with foreign MNOs. The MNO can produce and distribute for example voice-minutes, SMS and MMS messaging and data traffic themselves. The MNO can typically handle customer service, invoicing and collect consumption data and handle handset management themselves. Additionally the MNO will usually handle marketing and sales to end users themselves.

Mobile network enabler (MNE)

An MNE is characterised by having their own mobile licence and own mobile infrastructure, but the MNE has – unlike the MNO – no direct customer relationship with the end user. It is therefore only an MNO that can establish themselves as an MNE. The MNE is capable of handling Network Routing themselves and the MNE will typically have roaming deals with foreign MNOs. The MNE is able to produce and distribute for example voice minutes, SMS and MMS messages and data traffic. The MNE will typically be able to handle customer relationship, customer billing and collection of consumption data and mobile handset management. The MNE will not handle marketing and sales to end-users, this is a task for the MNE‘s wholesale customers.The MNE handles the technical side of the business and often also handles areas like customer service and legal assistance for mobile providers without their own network.

Mobile virtual network enabler (MVNE)

MVNEs are characterised by neither having a mobile licence nor mobile infrastructure or any direct customer relationship with the end-users. The MVNE is capable of handling Network Routing and the MVNE has typically entered into roaming deals with foreign MNOs. The MVNE is not capable of producing and distributing for example voice minutes and data traffic, but the MVNE will typically be able to handle producing SMS and MMS messages. A typical MVNE will handle customer service, customer billing, collection of consumption data and mobile handset management. Additionally the MVNE will not handle marketing and sales to end-users, this is a task for the MVNE‘s wholesale customers. The MVNE functions as a middleman between the MNO and the mobile providers without their own networks. The MVNE handles the technical side and often also tasks like customer service and legal assistance for mobile providers without their own network.

Mobile virtual network operator (MVNO)

An MVNO is characterised by neither having their own mobile licence nor own mobile infrastructure, but the MVNO has the direct customer relationship with the end user. The MVNO is able to handle Network Routing themselves and will typically have entered into roaming deals with foreign MNOs. The MVNO is often able to produce and distribute for example voice minutes and data traffic, typically by tagging onto their existing fixed line operation, and the MVNO will typically be able to handle producing SMS and MMS messages. A typical MVNO will be able to handle customer service, customer billing and collection of consumption data and handset management. Furthermore the MVNO will usually handle marketing and sales to end-users them self.

Mobile shared spectrum enabler (MSSE)

The MSSE has no mobile infrastructure of its own, but is a technology provider that uses innovative hardware and software to enable MVNOs to create their own actual mini-networks, while preserving and enhancing the relationship between MVNO and MNO. Using its agreement with the MNO, and operating within the MNO‘s spectrum license, the MSSE helps the MVNO to deploy its own network of low-power base-stations into areas the MNO could not justify, using Pico- and Femto-cell technologies. There is no impact on the MNO‘s mainstream network and it can, if it chooses, extend the reach of the its network at no cost, while the MVNO can improve its profitability by offering specialist and niche mobile solutions.

Service provider (SP)

An SP has neither a mobile licence nor own mobile infrastructure, but the SP has the direct customer relationship with the end user. An SP is not able to handle Network Routing themselves and a SP will not enter into roaming deals with foreign MNOs. The SP is not able to produce and distribute for example voice minutes and data traffic and cannot produce SMS or MMS messages themselves. The SP will typically handle customer relationship, customer billing consumption data and handset management themselves. Additionally, the SP will typically handle their own marketing and sales to end-users.

Branded reseller (BR)

A BR has neither a mobile licence nor own mobile infrastructure, but has the direct customer relationship to end-users. The BR cannot handle Network Routing themselves and the BR will not enter into roaming deals with foreign MNOs. The BR cannot produce and distribute for example voice minutes and data traffic themselves and are not able to produce SMS or MMS messages. A typical BR will not handle customer service, customer billing or collection of consumption data and handset management themselves.The BR will primarily concentrate their activities around marketing and sales to end-users. The BRs’ positive contribution to the value chain is (naturally) their “brand”, but their distribution power will also be a central asset for many Branded Resellers.

by Jon M

6 Responses to “What is a virtual mobile network?”

  1. Nick Sizer 20 February 2016 at 12:12 Permalink

    Hello! Can someone confirm (or deny) any tethering information for Virgin, please? I’m assuming they’re going down the data-only contract route that GiffGaff have, but I notice they don’t have their own reviews page yet.
    I already use them as my ISP (i.e. Internet SP) and I’m intrigued to know what experiences (mobile) people have had with them!

  2. SB 30 November 2013 at 11:15 Permalink

    Are there any limitations on tethering your laptop to your mobile on mobile sim only contracts – and does this vary between actual networks versus virtual networks?
    The 2 most cost effective monthly rolling sim only contracts for me right now appear to be giffgaff and Virgin Mobile.
    The giffgaff site suggests tethering isn’t allowed, the Virgin Mobile site has lots of great sounding information, but can’t find an answer to this question (and it’s not at all clear whether sim only customers have access to these benefits, e.g. free apps, etc).

  3. Claire 30 July 2013 at 16:54 Permalink

    I have a question about virtual mobile networks. I’ve just been speaking to vodafone, and mentioned talkmobile (who use vodafone’s network) to them.
    The vodafone rep told me that they always put vodafone customers first I.e if I was a talkmobile customer and was trying to make a call at the same time & location as several vodafone customers, then the vodafone calls would be put through in preference to mine, and my call could be dropped.

    Is this true (of any virtual network) or is it just vodafone desperately trying not to lose me as a customer?

    If it is true, how big a problem in fact is this?

    • Mobile Network Comparison 30 July 2013 at 17:28 Permalink

      We don’t know for sure whether this is the case for any virtual network. It sounds like Vodafone are lying to desperately keep your custom to be honest. We know that many virtual networks have categorically claimed that their service is no worse than that of the regular users (in some cases it’s actually better). Furthermore, implementing this would probably be more trouble that it’s worth.

      In summary, we doubt it’s going on. Of course, if it were the case, it would be unlikely that you’d get the virtual network to ever publicly admit it…

  4. KE 19 April 2012 at 17:16 Permalink

    Interesting summary, but what would be nice would be to add a regularly updated table that listed each of the operators you have in bullet form (plus iCard Mobile and others, which is in your top ten, but not the bullet list). Information I would be interested in when comparison shopping:
    – Parent company (if they go belly up, whom you could hold accountable, e.g. Telefonica UK/O2 for GiffGaff, Carphone Warehouse for TalkMobile)
    – Network operator (O2, Vodafone) whose infrastructure they use
    – Category under which they fall (in your opinion, e.g. GiffGaff, a subsidiary owned and managed by O2, has some of its own infrastructure, distinct from O2, with limited redundancy, by their own admission, which became clear when they experienced a major outage in March 2012 due to flooding in a data centre)
    – Who/how customer service is provided (e.g. GiffGaff uses customers and a limited number of ‘agents’, while TakMobile actually uses Vodafone’s customer service [although presumably not the same quality as the Vodafone-branded service])
    – URL links to the companies’ customer Web sites (often different from the investor pages, e.g. O2, iCard Mobile)

    I would also like to see rates, but felt that would be a minefield to maintain. Lo and behold, you do that on the Comparison tab!

    However, a deal breaker for me is whether and how much these companies charge for checking voice mail. That is often one of my highest minuted calling numbers per month. A lot of people are seeing this new ‘feature’ being added to their calling plans. Given the rates for exclusive minutes… Info on that (via Comparison tab table) would be really useful.

    Perhaps the table I am suggesting could be a page 2 (wouldn’t clutter what you have on the Comparison tab), although horizontal scrolling might work, as long as the name of the virtual network was always visible (possibly far left and right columns to keep Web design simple).

    Overall, I like the site (GiffGaff cola aside 😉 ). Will like it even more if iCard Mobile proves to be up to the very limited challenge I put to it (basic short-term phone service, no number transfer, no data, limited financial risk, low cost, delivered or purchased easily) … which TalkMobile already failed.

    • Mobile Network Comparison 19 April 2012 at 18:14 Permalink

      A couple of people have requested a voicemail column and it’s still definitely something we want to include as soon as we can find a way to get everything to fit 🙂


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