Birth pangs of the mobile virtual operators
Tough negotiations have been going on for months on end between the two local mobile operators and companies wanting to become mobile virtual network operators (MVNO) in Malta, i-Tech can reveal.MVNOs enter into an agreement with a major mobile network...
Tough negotiations have been going on for months on end between the two local mobile operators and companies wanting to become mobile virtual network operators (MVNO) in Malta, i-Tech can reveal.
MVNOs enter into an agreement with a major mobile network operator (MNO) to use its infrastructure or radio spectrum to provide new mobile services, commonly targeted at niche sectors of the market that cannot be properly reached by the large MNO.
Vodafone Malta is currently negotiating with four companies and Go Mobile with another one interested in becoming MVNO. Negotiations have dragged on for months and are proving tough according to a spokesman of one of the companies currently engaged in negotiating to become an MVNO.
"We have been trying to negotiate for over a year with both operators. We can vouch first-hand the enormous effort and resources required to negotiate with two dominant players in the market, even though our company has management experience and expertise, secure investment, and a business proposition that we believe is a win-win-win proposition - championing the Maltese consumers' rights, and with benefits for both MVNO and MNO."
I-Tech was requested not to reveal the identity of the potential MVNO, reflecting the shroud of secrecy on this issue resulting from the delicate negotiations that are covered by non-disclosure agreements between the parties. The spokesman declined to indicate the time frames for when the negotiations could be successfully concluded.
What prompted this particular company to enter into negotiations to become an MVNO?
"EU legislation regulating telecoms has forced the Maltese regulator, the Malta Communications Authority (MCA), to open up the local radio waves, recognising that this resource belongs to all the Maltese people and not just to the two dominant mobile network operators (MNO). Using this principle as our backing, we managed to attract significant foreign investment to this project."
The spokesman for this potential MVNO admitted it is not an easy task to become an MVNO in the small Maltese market.
"The challenges are many, such as attracting the investment and expertise required to develop and launch such an operation and overcoming the initial resistance and delaying tactics from dominant operators. Malta is a small market and investing in the network elements required by a full MVNO, is a risky affair. The MCA has stated that it had to resort to taking this action because unlike situations in other EU member states, where commercial agreements have been reached between mobile operators and various MVNOs, local mobile operators still to date have failed to reach a commercial agreement for no apparent justifiable reason."
There are a number of MVNO models that can be adopted. These range from a full MVNO model, whereby the MVNO operator would own the core network elements including billing systems, customer relationship management, etc except for the radio access network which the MVNO would need to access from the mobile network operator; or a reseller type of MVNO model whereby such MVNO operators will depend entirely on the hosting network's infrastructure to provide their own services under a different brand. The SIM cards for all type of MVNOs need to have a separate profile from that of the hosting network. The common denominator is that the MVNO does not invest in its own radio network and instead uses the radio network of the MNO.
"The technical hosting framework will ultimately depend on the negotiations between the MNO and the MVNO," confirmed a spokesman for Vodafone Malta.
While this potential MVNO recognised the importance of the MCA's opening up of the market to MVNOs, the authority's approach is cautious.
"The MCA will only intervene if commercial negotiations between a full MVNO and an MNO fail and the MCA is requested to intervene by any of the parties," confirmed a spokesman for the authority.
There is a general agreement among all parties involved that ultimately it's the local mobile market that will determine whether there is a place for MVNOs and, if there is one, for how many of them.
"Vodafone is amenable to undertake commercial negotiations with MVNOs that have a sound business case and the right business attitude towards the mobile market," according to the operator's spokesman.
"We are, however, against any regulatory interventions to force MVNO access since this would ultimately work against the consumer and will not help the spirit of commercial negotiations between parties."
Peter Gauci, director at Go Mobile, said his company "as an operator owing its existence to the opening up of competition in the market, is not averse to having healthy competition and service offerings on an equal playing field aimed at maximising and sustaining consumer welfare in both the short and long term, being it from a third operator or a full MVNO."
The issue of the third mobile operator will further mix the cards on the table. The MCA is currently re-processing the application by 3G Telecommunications Ltd to become the third MNO in Malta offering third generation mobile communication (3G). The first application did not lead to an assignment of the licence as the MCA faced significant changes to the company's original application during the first evaluation process. Legal proceedings put 3G Telecommunications back on track with a new evaluation process currently being done.
Opposition to the third full operator (MNO) remains.
"Our position has not changed," insisted the Vodafone Malta spokesman. "We still maintain that a small market like Malta will have difficulty to sustain three mobile network operators. Having a third operator coupled with the introduction of a number of MVNOs, will only serve to fragment the market to an extent where it becomes unsustainable, especially when one takes into account the investment needed to maintain and upgrade your technology platforms."
Potential MVNOs are convinced their entry into the market will provide a positive contribution and the mobile user will ultimately benefit.
"A credible, innovative MVNO will bring fresh and niche-driven solutions to the lifestyles of its target market, in a way that mass-market mobile operators are structurally incapable of achieving. The MVNO takes the proven and solid technical building blocks from the established network operator and works with its customers to create the fun, almost individual offerings that can keep up with the day-to-day drivers of the Maltese mobile user, while keeping the basic telephone and messaging and texting that underpins it all," concluded the spokesman for the potential MVNO.
MVNOs enter into an agreement with a major mobile network operator (MNO) to use its infrastructure or radio spectrum to provide new mobile services, commonly targeted at niche sectors of the market that cannot be properly reached by the large MNO.
Vodafone Malta is currently negotiating with four companies and Go Mobile with another one interested in becoming MVNO. Negotiations have dragged on for months and are proving tough according to a spokesman of one of the companies currently engaged in negotiating to become an MVNO.
"We have been trying to negotiate for over a year with both operators. We can vouch first-hand the enormous effort and resources required to negotiate with two dominant players in the market, even though our company has management experience and expertise, secure investment, and a business proposition that we believe is a win-win-win proposition - championing the Maltese consumers' rights, and with benefits for both MVNO and MNO."
I-Tech was requested not to reveal the identity of the potential MVNO, reflecting the shroud of secrecy on this issue resulting from the delicate negotiations that are covered by non-disclosure agreements between the parties. The spokesman declined to indicate the time frames for when the negotiations could be successfully concluded.
What prompted this particular company to enter into negotiations to become an MVNO?
"EU legislation regulating telecoms has forced the Maltese regulator, the Malta Communications Authority (MCA), to open up the local radio waves, recognising that this resource belongs to all the Maltese people and not just to the two dominant mobile network operators (MNO). Using this principle as our backing, we managed to attract significant foreign investment to this project."
The spokesman for this potential MVNO admitted it is not an easy task to become an MVNO in the small Maltese market.
"The challenges are many, such as attracting the investment and expertise required to develop and launch such an operation and overcoming the initial resistance and delaying tactics from dominant operators. Malta is a small market and investing in the network elements required by a full MVNO, is a risky affair. The MCA has stated that it had to resort to taking this action because unlike situations in other EU member states, where commercial agreements have been reached between mobile operators and various MVNOs, local mobile operators still to date have failed to reach a commercial agreement for no apparent justifiable reason."
There are a number of MVNO models that can be adopted. These range from a full MVNO model, whereby the MVNO operator would own the core network elements including billing systems, customer relationship management, etc except for the radio access network which the MVNO would need to access from the mobile network operator; or a reseller type of MVNO model whereby such MVNO operators will depend entirely on the hosting network's infrastructure to provide their own services under a different brand. The SIM cards for all type of MVNOs need to have a separate profile from that of the hosting network. The common denominator is that the MVNO does not invest in its own radio network and instead uses the radio network of the MNO.
"The technical hosting framework will ultimately depend on the negotiations between the MNO and the MVNO," confirmed a spokesman for Vodafone Malta.
While this potential MVNO recognised the importance of the MCA's opening up of the market to MVNOs, the authority's approach is cautious.
"The MCA will only intervene if commercial negotiations between a full MVNO and an MNO fail and the MCA is requested to intervene by any of the parties," confirmed a spokesman for the authority.
There is a general agreement among all parties involved that ultimately it's the local mobile market that will determine whether there is a place for MVNOs and, if there is one, for how many of them.
"Vodafone is amenable to undertake commercial negotiations with MVNOs that have a sound business case and the right business attitude towards the mobile market," according to the operator's spokesman.
"We are, however, against any regulatory interventions to force MVNO access since this would ultimately work against the consumer and will not help the spirit of commercial negotiations between parties."
Peter Gauci, director at Go Mobile, said his company "as an operator owing its existence to the opening up of competition in the market, is not averse to having healthy competition and service offerings on an equal playing field aimed at maximising and sustaining consumer welfare in both the short and long term, being it from a third operator or a full MVNO."
The issue of the third mobile operator will further mix the cards on the table. The MCA is currently re-processing the application by 3G Telecommunications Ltd to become the third MNO in Malta offering third generation mobile communication (3G). The first application did not lead to an assignment of the licence as the MCA faced significant changes to the company's original application during the first evaluation process. Legal proceedings put 3G Telecommunications back on track with a new evaluation process currently being done.
Opposition to the third full operator (MNO) remains.
"Our position has not changed," insisted the Vodafone Malta spokesman. "We still maintain that a small market like Malta will have difficulty to sustain three mobile network operators. Having a third operator coupled with the introduction of a number of MVNOs, will only serve to fragment the market to an extent where it becomes unsustainable, especially when one takes into account the investment needed to maintain and upgrade your technology platforms."
Potential MVNOs are convinced their entry into the market will provide a positive contribution and the mobile user will ultimately benefit.
"A credible, innovative MVNO will bring fresh and niche-driven solutions to the lifestyles of its target market, in a way that mass-market mobile operators are structurally incapable of achieving. The MVNO takes the proven and solid technical building blocks from the established network operator and works with its customers to create the fun, almost individual offerings that can keep up with the day-to-day drivers of the Maltese mobile user, while keeping the basic telephone and messaging and texting that underpins it all," concluded the spokesman for the potential MVNO.