The first mobile virtual network operators (MVNOs) are expected to launch in the second quarter of next year and there could be no fewer than four or five, it was learnt.
"Negotiations are progressing steadily but are still at an early stage. We envisage that the first MVNO will launch its services by the second quarter of next year. Other MVNOs will follow later next year," explained Joseph Muscat, head of Mobile Plus at Vodafone Malta.
"Our projections and market analysis indicates that there could be around four to five MVNOs in the market."
When Go Mobile was asked to give its views on MVNOs, a company spokesman replied that "at present Go Mobile is pursuing a definite commercial strategy vis-Ã -vis MVNOs. We are not in a position to disclose more information at this point."
MVNOs enter into an agreement with a major mobile network operator (MNO) to use its infrastructure or frequencies to provide new mobile services, commonly targeted at niche sectors of the market that cannot be properly reached by the large MNO.
MVNOs are based on different models, depending on their technical set-up and the range of services they provide. The full MVNO 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. A reseller type of MVNO would 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 factor is that the MVNO does not invest in its own radio network and instead uses the radio network of the MNO. Last May i-Tech reported that Vodafone Malta was negotiating with four companies and Go Mobile with another one interested in becoming an MVNO. However, six months later, the parties are still at the negotiating table.
"Enabling MVNOs is quite a complex task to accomplish," said Mr Muscat. "It presents a number of technical and logistical challenges which a mobile network operator like Vodafone needs to consider very carefully. We wanted to make sure that we adopt the best strategy in enabling MVNOs drawing upon best practice in this field."
A potential MVNO who was negotiating with the two MNOs stressed not just the complexity but also the toughness of the discussions.
"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."
A few weeks ago Vodafone Malta announced it had signed an exclusive wholesale partnership deal with ASPIDER Solutions to support the launch of MVNOs in Malta. At the time both parties said they expect the MVNO market in Malta to develop in much the same way as other jurisdictions like Spain, Netherlands, Belgium, Sweden and the UK.
So what kind of products and services will MVNOs provide differently from what Vodafone Malta is already offering?
"This still remains to be seen," replied Mr Muscat. "Traditionally MVNOs focus on particular consumer segments in the market and therefore, tailor their services according to the needs of their segment or niche e.g. value adding services." MVNOs can be both 2G, the second generation network that provides SMS, voice communication and simple internet access, and 3G, the third generation network launched in recent months in Malta that supports video communication, much faster internet access on mobile handsets and other wireless devices, and other interactive features such as mobile commerce.
If all goes according to plan, Malta will have three MNOs (Vodafone Malta, Go Mobile and Melita) and several MVNOs. Melita is in the process of getting the third 3G mobile licence after it entered into an agreement with the shareholders of 3G Telecommunications Ltd which were awarded the licence this summer. Melita is expected to launch commercially next year.
In this scenario is the Maltese market able to support successfully three MNOs and several MVNOs?
"We believe that such a market structure will lead to fragmentation which may hinder long-term investment," warns Vodafone's executive. "Having said this, Vodafone Malta is ready to compete in this new market environment and retain its leadership by continuously focusing on customers' needs, service quality and value propositions."
Asked to comment on the entry of Melita Cable into the mobile market as the third MNO, Mr Muscat only said "we have discussed our views about this with the responsible authorities."
Both Vodafone Malta and Go Mobile have always expressed themselves against the third MNO in Malta on the grounds that the market is too small for three major players. However, the Malta Communications Authority (MCA) has issued three 3G licences that were awarded to Vodafone Malta, Go Mobile and 3G Telecommunications, the only three applicants.
MVNOs do not need a licence from the MCA to operate but, the authority will intervene on request or if commercial negotiations between a full MVNO and an MNO fail.
"Negotiations are progressing steadily but are still at an early stage. We envisage that the first MVNO will launch its services by the second quarter of next year. Other MVNOs will follow later next year," explained Joseph Muscat, head of Mobile Plus at Vodafone Malta.
"Our projections and market analysis indicates that there could be around four to five MVNOs in the market."
When Go Mobile was asked to give its views on MVNOs, a company spokesman replied that "at present Go Mobile is pursuing a definite commercial strategy vis-Ã -vis MVNOs. We are not in a position to disclose more information at this point."
MVNOs enter into an agreement with a major mobile network operator (MNO) to use its infrastructure or frequencies to provide new mobile services, commonly targeted at niche sectors of the market that cannot be properly reached by the large MNO.
MVNOs are based on different models, depending on their technical set-up and the range of services they provide. The full MVNO 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. A reseller type of MVNO would 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 factor is that the MVNO does not invest in its own radio network and instead uses the radio network of the MNO. Last May i-Tech reported that Vodafone Malta was negotiating with four companies and Go Mobile with another one interested in becoming an MVNO. However, six months later, the parties are still at the negotiating table.
"Enabling MVNOs is quite a complex task to accomplish," said Mr Muscat. "It presents a number of technical and logistical challenges which a mobile network operator like Vodafone needs to consider very carefully. We wanted to make sure that we adopt the best strategy in enabling MVNOs drawing upon best practice in this field."
A potential MVNO who was negotiating with the two MNOs stressed not just the complexity but also the toughness of the discussions.
"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."
A few weeks ago Vodafone Malta announced it had signed an exclusive wholesale partnership deal with ASPIDER Solutions to support the launch of MVNOs in Malta. At the time both parties said they expect the MVNO market in Malta to develop in much the same way as other jurisdictions like Spain, Netherlands, Belgium, Sweden and the UK.
So what kind of products and services will MVNOs provide differently from what Vodafone Malta is already offering?
"This still remains to be seen," replied Mr Muscat. "Traditionally MVNOs focus on particular consumer segments in the market and therefore, tailor their services according to the needs of their segment or niche e.g. value adding services." MVNOs can be both 2G, the second generation network that provides SMS, voice communication and simple internet access, and 3G, the third generation network launched in recent months in Malta that supports video communication, much faster internet access on mobile handsets and other wireless devices, and other interactive features such as mobile commerce.
If all goes according to plan, Malta will have three MNOs (Vodafone Malta, Go Mobile and Melita) and several MVNOs. Melita is in the process of getting the third 3G mobile licence after it entered into an agreement with the shareholders of 3G Telecommunications Ltd which were awarded the licence this summer. Melita is expected to launch commercially next year.
In this scenario is the Maltese market able to support successfully three MNOs and several MVNOs?
"We believe that such a market structure will lead to fragmentation which may hinder long-term investment," warns Vodafone's executive. "Having said this, Vodafone Malta is ready to compete in this new market environment and retain its leadership by continuously focusing on customers' needs, service quality and value propositions."
Asked to comment on the entry of Melita Cable into the mobile market as the third MNO, Mr Muscat only said "we have discussed our views about this with the responsible authorities."
Both Vodafone Malta and Go Mobile have always expressed themselves against the third MNO in Malta on the grounds that the market is too small for three major players. However, the Malta Communications Authority (MCA) has issued three 3G licences that were awarded to Vodafone Malta, Go Mobile and 3G Telecommunications, the only three applicants.
MVNOs do not need a licence from the MCA to operate but, the authority will intervene on request or if commercial negotiations between a full MVNO and an MNO fail.