If your company has decided or is researching the requirements needed to start an MVNO, the option of partnering with an established carrier (MNO) may be the right choice.
Carrier partnerships come in a variety of flavors, including wholesale arrangements and enabler platforms. With wholesale agreements the best option for larger organizations or initiatives with the resources to implement the majority of the OSS/BSS systems required to operate the MVNO. Leveraging a carrier’s enablement platform reduces the operational overhead and systems requirements needed when compared with a wholesale arrangement.
True wholesale agreements offer dedicated business units within the carrier itself to provide direct operational support, unique business opportunities and tightly coupled technical integrations that give their clients the ability to function as a wireless carrier with almost the same capabilities as the carrier itself.
Carrier provided enablement platforms are essentially MVNE (mobile virtual network enabler) services, but from the carriers themselves. Typically an MVNE would obtain a wholesale agreement from a carrier then create the supporting systems and services to enable MVNO (mobile virtual network operator) clients. Some carriers offer these MVNE services directly.
Regardless of the offering, understanding and integrating with an established carrier has a considerable number of challenges and restrictions to overcome. The challenges and restrictions become more pronounced with the size and popularity of the MNO. If your business plans require access to a Tier 1 carrier you will need a very clear business model and an aggressive forecast to negotiate a favorable agreement.
Onboarding an experienced mobile consultant to guide your organization through the quagmire of options and operational decisions will greatly reduce your startup timeframe, provide more sophisticated planning and prevent costly mistakes.
All Carriers Have Similar Operations, But Remain Very Different
Mobile services are mobile services right? At an abstract level, the underlying technologies for all carriers are the same so to some degree and having an understanding of one carrier will roughly translate to an understanding of a different carrier.
The main differences occur operationally and commercially.
Each carrier is structured differently and has implemented esoteric operational processes and support systems; usually a mixture of internally developed and commercial solutions. The capabilities of these systems and the business objectives of each carrier drive the uniqueness of each provider’s mobile service offering.
For example, one carrier may be more interested in preserving their retail business unit’s competitive reach and will restrict rates and service access to their wholesale customers. While other carriers have given priority to their wholesale businesses and allow much deeper integrations and mobile services access than their competitors.
A mobile consultant will understand how the big carriers operate and how to navigate their internal project and integration requirements. This expertise is invaluable when considering a direct MNO partnership.
Wholesale Contracts and Rates
One of the more difficult aspects of commissioning the services of an established carrier is contract negotiations.
Understanding what terms are currently being accepted by others in the industry can be critical to your profitability and potential risk. If you agree to rates that become noncompetitive in the near future it will be very difficult to maintain profitability. And accepting an agreement with aggressive minimums in order to obtain favorable rates can be extremely risky if your market doesn’t materialize or economic factors work against you. Always include provisions to ensure frequent rate and minimum adjustments related to the economy, your market and the industry.
One of the best ways to negotiate favorable rates and low minimums is by hitting your forecasts. There is a lot of risk for carriers when working with an MVNO. As underlying network service fees and roaming charges are incurred the carriers must carry these liabilities until they receive payment. To control this risk, carriers may request frequent service payments or considerable Letters of Credit to ensure their expenses are covered. MVNOs that can show realistic models, controlled business operations and steady subscriber growth will be able to negotiate better terms.
Don’t be afraid to carrier shop. A lot can be inferred from rates and terms when comparing one carrier against another. Taking into account coverage areas, service capabilities, partnership benefits and future growth planning, it can be quite telling with regards to best fit and how to leverage the information to obtain better terms.
Hiring a mobile consultant with contract experience will help your company get the most favorable terms and conditions.
Integration and OSS
The process of onboarding a carrier into your organization’s processes and workflows involves integrating with that carrier’s unique operational support systems and APIs (application programming interfaces).
Each carrier has their own OSS methods and structures that your teams will need to learn. These functions include billing and usage collection, network provisioning, device and line management, price plans and service features, and infrastructure connectivity.
Depending upon the level of sophistication your company requires, the amount of integration could be relatively light or heavily involved and complex.
Organizations that rely more upon manual processes to operate their businesses may be able to function without integration at all by utilizing the carrier’s OSS administrative portals directly and by reliance upon the carrier’s line management access rules. Companies with their own internal systems and processes will want to take advantage of the carrier’s API interfaces and UDR (universal detail record) event collection facilities to manage their operations and consumer network access.
Deciding how integrated your company should be requires careful thought and analysis of the costs, benefits, timeframes and maintenance complexities required to find the proper balance of carrier managed versus internally managed systems. A mobile consultant with knowledge of MVNO operations and technology automation will make determining these decisions much quicker and more accurate.
Usage Audit / Reconciliation and Billing
Another key area of focus when dealing directly with a carrier is understanding how that carrier processes, manages and provides billing and usage information. Having very tight controls around your network’s expenses can be the difference between being profitable and losing money.
Your customers pay for a certain level of access to the network. Unless the plan your consumer selects is completely unlimited and post paid (i.e. services are paid for after using) you will need some mechanism to determine when their access to the network should be turned off. This process can happen a number of ways by leveraging the carrier’s access controls or by implementing the service termination processes internally and utilizing the carrier’s APIs to manage line access.
At the consumer line level, controlling access leakage (i.e. the consumer gets more wireless services than they paid for) and breakage (i.e. the consumer uses too much or doesn’t use enough wireless service to fulfill the carrier price plan model) are the two most prevalent operational concerns.
Carrier billing reconciliation is very important to ensure your company is only paying for the services provided by the carrier. Usage collection is complicated and easily miscalculated. It is imperative your organization keep detailed internal usage records to compare against the invoice from your carrier. The carrier bill will include detailed usage records as well in a format proprietary to the carrier. Your team will need to breakdown the data to a format understood by your accounting team.
The carrier billing audit is the time to ensure your consumer usage matches and also to ensure your invoice matches the terms agreed to in your contract. Many mistakes are caught during this necessary audit step.
Wholesale bill processing will be required if your operation includes support for MVNO clients. This involves translating the rates and bucketed pricing you receive from your carrier into the rates and products you provide to your client. As you might expect, this process can become very complicated quickly if your organization provides pricing and terms considerably different than your carrier. For example, if your company offers tiered pricing, but your carrier does not then much care must be taken to ensure profitability when your clients incur higher volumes.
Overall, billing, audit and usage reconciliation is one of the most complicated aspects of working directly with a carrier and requires a significant amount of resource overhead and know how to properly manage.
Price Plans and Features
Carriers typically provide their network clients with simplified methods for grouping and charging for different network services like voice, data, and SMS. Unlike operating your own mobile network, a carrier will hide the underlying subscriber management, data packet interfaces, voice, SMS/MMS, and IP multimedia system components behind an abstract “price plan” concept.
A price plan is an easy way to describe which services are included and at what rate. For example, in an LTE network, a voice only price plan, when applied to a consumer account/line during the provisioning process, would only setup the HSS subscriber account and the IMS components necessary to support voice services. All other network services would be blocked.
Because there are so many different options available for mobile services, the “one size fits all” price plan approach quickly becomes impractical so the concept of “features” exists to augment price plans with specific options. For example, enabling HD voice service or voice mail as a feature applied to a voice-only or unlimited price plan.
While price plans and feature codes are much easier than working directly with each network component to provision services, the sheer number of plans and feature options creates its own set of complexities and operational impacts. Much care and planning must be taken to organize the esoteric requirements properly to ensure smooth operational application and management.
Another side impact from these provisioning mechanisms is the management of the costs associated. Price plans can include multiple service channels (i.e. voice, SMS/MMS and data services) which may be contracted at different rates dependent upon usage volume tiers and caps. Each carrier has a different perspective on how services are rated and some are very complex. Line cost management is another key profitability function that should not be ignored.
A well trained mobile consultant will understand how price plans and features work and how to incorporate the management of these provisioning components into your operational workflow.
Self Managed versus Carrier Managed
When selecting a carrier, the breadth of services the carrier makes available to you should be a strong consideration. Some carriers expose more options and are much more willing to offer deeper integrations and to partner with your company to develop a comprehensive relationship that is unique in the industry.
Care must be taken when deciding how integrated your organization should become with the selected carrier. Should you self-manage your operations and develop your own OSS and billing systems? Or should you leverage the carrier’s platforms and solutions to operate your business?
It will depend heavily upon how sophisticated your need is, the expertise your company has access to, and the level of services provided by the carrier.
Network Compliance, Support and Branding
Several considerations that are often overlooked include the carrier’s network compliance requirements, the available mobile equipment to operate on the carrier’s frequency bands, and the use of the carrier’s brand names and logos.
Compliance. When operating your own mobile network the compliance requirements for attached devices can be limited to FCC, UL and ITU standards, but when working with carriers there will be additional requirements for the types of equipment approved to attach to their networks. Most carriers will have some form of PCTRB testing and compliance requirements along with security, bandwidth, latency and activity restrictions.
Frequency. Not all devices can operate at the frequency bands allocated to a given carrier. As devices become more sophisticated the number of supported bands per devices is ever increasing, but there remains a real cost concern when adding radio support to a device so many mobile equipment providers only supports specific frequency bands and protocols.
Care must be taken when planning your business model to ensure the devices you wish to provide to the market will be certified and function properly on your carrier of choice.
Branding. Not all carriers will allow you to use their brands and logos. When negotiating your agreement, if your market strategy relies heavily on the underlying confidence of your supporting carrier network you will want to ensure there is a framework in place to use your carrier’s brand names and logos to bolster your business plans.
To Sum Up
Integrating with an established carrier is a viable and considerably easier approach to establishing a mobile network service than building a network from scratch, but the choice comes with its own set of obstacles and challenges. If your team is not experienced or familiar with direct carrier partnerships it is in your best interest to onboard a consultant with knowledge specific to your goals.
Onboarding a mobile consultant will provide working knowledge of carrier operations, business models, pricing strategies and technical structure.