I had the pleasure of participating in the networking event organised by MVNO Dynamics which included a panel session related to the state of MVNOs in the UK, which triggered me to write this entry.
The telecoms industry loves its acronyms, which invariably have different meanings in different contexts and need redefining each time used. In relation to this blog post, the only relevant aspect of the definition of an MVNO is that they provide mobile services to end users but do not own their own radio access network and therefore by definition are dependent on operators who in turn do own this access technology.
Governments are responsible for licensing our airwaves and have profited greatly by packaging and selling radio spectrum to mobile operators. They therefore have a vested interest and are obliged to allow and support these mobile operators to monetise these licenses.
By definition due to the ownership of radio access by the few, the commercial reality is that MVNOs are locked in and that they will only be able to launch services which the mobile operator deems are non-competitive to their own businesses and hence one could argue that MVNOs are limited to providing supplementary services in line with the host mobile operators agenda. Consequently, there will be a natural tendency for mobile operators to want to see existing assets and services being sweated and hence will throttle service innovation provided by others.
Therefore you might argue that as long as the radio spectrum is seen as a rare resource to be controlled by the few with a specific vested interest supported by the governments, the attempts of Neelie Kroes and the EU 2020 digital agenda to increase innovation and make mobile an accessible ubiquitous resource will fail.
In support of this thinking, please take a minute to consider those companies in the mobile space you would associate with both innovation and success across Europe – you will most likely think of companies such as Apple, Facebook and WhatsApp. What do they have in common? The services they offer are not built on the business of an MNO and therefore are not controlled by an MNO and can scale across countries seamlessly. Interestingly, these services are often characterised by MNOs as over the top providers (OTT) as they are cannibalising the mobile operators’ services and can bypass the operators.
We therefore currently have 2 worlds: the MNO and the OTT world, both vying for the direct relationship with subscribers. It is up to the governments to consider whether owning radio spectrum by the few is really in the interest of the public and the governments who serve them.
What are the options worth considering?
To my knowledge, radio spectrum is owned by the citizens and therefore needs to be licensed to serve the public and so as part of the licensing agreement mobile operators should be made to make mobile radio access available to all – “must carry”. Alternatively and a more radically approach would be for the governments to define a new category of provider who solely provides radio access networks and make these available to all. The latter could enable spectrum harmonisation across Europe and provide efficiencies and scale which is currently lacking. This way all service providers become MVNOs, we then have an even playing field for all and innovation is fostered!
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From your IFG Consulting team.