mvnos and mvnes: simple, automated, cost effective deployments
TRANSCRIPT
© 2014 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information. Page 1 of 13
White Paper
MVNOs and MVNEs: Simple, Automated, Cost-Effective Deployments
Executive Summary
Today’s mobile market is growing quickly, and the growth is not slowing down anytime soon. According to the
Cisco® Visual Networking Index (VNI) Global Mobile Data Traffic Forecast, 2013-2018, both the number of mobile
subscribers and the volume of traffic are expected to grow dramatically. By 2018, there will be more than 10 billion
mobile-ready devices and connections, about 3 billion more than in 2013. At the same time, the report indicates
that in the same timeframe, global mobile IP traffic will reach an annual run rate of 190 exabytes, up from less than
18 exabytes in 2013.
Mobile operators, enterprises, and over-the-top (OTT) players alike are looking at new ways to take advantage of
the growth. New mobile virtual network operators (MVNOs) are appearing, and they can use the network and
assets of mobile virtual network enablers (MVNEs) to set up their network and create new business models and
enter different markets.
In order to bring long-term business success in the MVNO and MVNE business, MVNOs and MVNEs need to use
their current capabilities to their best advantage and create new and differentiated services that are hard for their
competitors to replicate. With the Cisco MVNO and MVNE solution, consisting of the Cisco Policy Suite (PS) of
software solutions, the Cisco Virtualized Packet Core (vPC), and the Cisco ASR 5000 Series Aggregation Services
Router Packet Gateway, MVNOs and MVNEs can achieve the business outcomes in providing services that are
segmented, targeted, and quick to roll out. This Cisco solution enables you to:
● Increase service value with innovative services to end users
● Generate higher perceived value in your services
● Differentiate yourself and effectively identify and gain market
● Develop an extensible platform that allows you to easily introduce new technologies such as access control
● Increase your average revenue per user (ARPU) as your business grows or increase the ARPU of your
current base
This white paper outlines typical use cases of MVNOs and MVNEs and the Cisco solution to address them.
Market Trends for MVNOs and MVNEs
Both MVNOs and MVNEs recognize the opportunities in the growing mobile marketplace, but they must be able to
differentiate their services from other service providers to gain market share and grow profitability with new
business models and lower-cost operational models. In markets where MVNOs are just beginning to operate
because of regulators who open the market, it is imperative that MVNOs and MVNEs have a platform to roll out
services quickly and with very low operating cost, as shown in Figure 1 with a survey by Informa.
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Figure 1. Performance of MVNO Market
Two observations are notable:
● Price pressure commands more differentiation: An overwhelming majority of respondents believe that
MVNOs need to differentiate their business models. Cloud-based services and mobile broadband are
named as the most important service-differentiation tools.
● Countless business and technology challenges must be addressed: Respondents think that existing hosting
platforms lack technical and commercial flexibility, all leading to excessive costs both in the startup phase
and when fairly ordinary changes are needed (such as updating a service plan).
The same survey showed the top business and technology challenges for MVNEs, as shown in Figure 2.
An overwhelming number of responses indicated the importance of flexibility in the platform to provide new
services, bundles, etc.
Figure 2. Top Business and Technology Challenges for MVNEs
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The Cisco Policy Suite platform allows MVNOs and MVNEs to meet those challenges with the following
capabilities:
● Service velocity and service innovation
● Technology that will be compatible as the operator grows, including:
◦ Orchestration capabilities that save capital expenditures (CapEx) and operating expenses (OpEx) by
using commercial off-the-shelf hardware (COTS)
◦ On-demand scaling with Network Function Virtualization (NFV), which allows for use of network capacity
based on the mobile users’ behavior
◦ An extensible platform that allows for easy introduction of new technologies such as easy network access
selection with Access Network Discovery Selection Function (ANDSF) and Hotspot 2.0
MVNO Market Differentiation Examples
One company, K-Opticom, targets its existing customer base of fixed broadband users with a bundled package
upgrade that includes Mobile Services for 4G Data and Voice (Figure 3).
Figure 3. K-Opticom
Another MVNO is targeting the machine-to-machine (M2M) market with investments in MVNO infrastructure and
technology partnership with Aeris Communications, an M2M application provider (Figure 4).
Figure 4. MVNO in Partnership with Aeris Technology Company
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A third MVNO entering the market has implemented a strategy of partnering with an OTT player to provide quality
service on OTT applications, including OTT services such as voice-quality OTT voice for applications such as
Skype (Figure 5).
Figure 5. MVNO Partnering with OTT Player
MVNE Platform
Figure 6 shows a typical MVNE platform.
Figure 6. MVNE Data Center Service for MVNOs
The fully virtualized Cisco solution for third- and fourth-generation (3G and 4G, respectively) packet core (vPC) with
the Packet Data Network Gateway (P-GW) and Gateway GPRS Support Node (GGSN), Policy Suite for policy,
Diameter Signaling Routing (DRA), and charging provides the MVNE with a cost-effective advantage in today’s
market. Together with NFV on a virtual machine (VM), the Cisco solution allows for activation of resources where
the capacity is needed.
Within the MVNE, each MVNO has its own virtual instance. Alternatively, each MVNO can be based on a single
instance in a multitenancy configuration.
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MVNE Use Case Examples
Example 1: MVNEs Providing Wholesale Service to MVNOs
Use Case
In this use case, the MVNE provides services to host a MVNO in its data center and provides all the necessary
end-to-end mobility services.
Business Requirement
As a hosted solution from the MVNE, the MVNO intends to sell prepaid cards and have a signed contract for
10,000 subscriber-identity-module (SIM) cards. The MVNO understands its market segment and signs up for
10,000 SIM cards; the prepaid cards have 3-month validity in Japan and low-cost roaming service.
Use Case Description
The MVNE provides hosting for the MVNO, and the MVNO has its own dedicated instance for policy and charging;
the gateway is also another virtualized instance for this MVNO.
The MVNE provides wholesale service as a one-stop shop to enable the MVNO to have:
● 100 GB per month for all its users, and beyond 100 GB, the usage is tracked and settled on a per-10-GB
block
● Data roaming (rated based on country and preferred operator)
The MVNO then provides a prepaid mobile service to its users through:
● Prepaid SIM cards (real-time charging)
● Short-code and interactive-voice-response (IVR) recharge and balance query
● Low-cost roaming to specific countries
The Cisco Policy Suite provides rating, charging, balance management, and policy to the MVNO (Figure 7). In
addition, an application programming interface (API) allows for easy integration into a portal, Short Message
Service (SMS) gateway, or IVR to recharge prepaid SIM cards.
Figure 7. Cisco Policy Online Charging System
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The Cisco solution also allows the MVNO to be based on a virtual instance, or it can share the same instance,
providing the MVNE with a very-low-cost platform to provide the service as a data center service (Figure 8). The
size of the MVNO can start from as small as 1000 users to as large as the operator requires (that is, 200 million or
more).
Figure 8. MVNO with Its Own Separate Virtualized Packet Core, with Policy and Charging Hosted by an MVNE
Cisco Policy Suite also provides a cost advantage for the MVNO by having policy charging and online charging
functions integrated in the platform, as shown in Figure 9. In addition, further processing of billing information can
be performed using simplified CSV formatted records. As a result the web services API, which is a part of Cisco
Policy Suite, can provide flexible provisioning, subscriber queries, and OTT triggering for the MVNO to access
additional information.
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Figure 9. Simplified Upper-Layer OSS Interfaces
Clearly, the MVNE can provide the infrastructure, connectivity, and applications as a one-stop shop to a MVNO. In
addition to the business model mentioned previously, following are a few additional examples of what an MNVE
might decide to provide to MVNOs:
● SIM cards
● Mobile data and voice
● Mobile roaming
● API exchange for OTT use case (mobile)
● Quality of service (QoS), end-to-end if applicable
● Data center
● Global roaming exchange
Example 2: Multitenant MVNE
In this example, the MVNE provides services for multiple MVNOs with different business models. As Figure 10
shows, the MVNE can provide different business models with unique charging models for the business
requirements of each MVNO. In the figure, the three MVNOs have reflected these business models:
● MVNO 1: Sells prepaid data services to its subscribers
● MVNO 2: Sells Multi-SIM Service - local rates in three countries
● MVNO 3: Sells low-cost data roaming service
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Figure 10. MVNOs Are Logically Separated and Hosted by an MVNE
It should be noted that MVNO customers are not limited to operators. They can also be enterprises that want to
provide mobile services to their users. Within enterprises, IT can provide a high level of control and cost advantage
by integrating mobile services with their enterprise applications as MVNOs.
MVNO Use Case Example for an Operator
Connected Vehicles (Machine-to-Machine)
In this example, the MVNO offers a vehicle manufacturer an end-to-end solution that incorporates mobile
connectivity for its new car models.
Business Requirement
Many vehicle manufacturers today are introducing mobile M2M connectivity in new car models. Some examples
include (Figure 11):
● Electronic control units (ECUs): Information about users’ driving habits
● Emergency calls and vehicle maintenance notifications
● Global Positioning System (GPS) maps
● In-vehicle Internet access with Wi-Fi hotspot tethering
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Figure 11. Network Architecture
Use Case Description
The Cisco MVNO solution allows for a secure tunnel from the MVNO to the M2M providers. In addition, mobility
enables the operator to provide a host of use cases for vehicles with SIM cards, including:
● Redirection to portals; for example, when the control panel starts the browser, users are directed to the car
manufacturer’s site first before they can start surfing
● Quota: Charging and enforcement
● Excess coverage quota and charging
● Radio access-type policies
● Time-based policies
● Different QoS for different vehicle models
● Group usage monitoring services
● Application-based usage restriction and control
MVNO Enterprise-Focused Use Cases
Use Case
In this case, the MVNO provides an end-to-end solution to enterprises for their users’ ease of access to enterprise
services and basic mobile services.
Business Requirement
In addition to mobile services, enterprises need a direct, secure tunnel for their users without the need for a VPN to
give clients access to corporate services. Figure 12 shows that enterprises can use that secure tunnel established
between MVNO and the enterprise.
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Figure 12. Network Architecture for Enterprise Use Cases
Use Case Description
The Cisco gateway for the MVNOs, which includes Policy Suite and the packet core, allows for a secure tunnel
directly to corporations. Possible use cases include:
● Corporate bundled quota
● Application-based usage restriction and control
● Roaming packages; for example:
◦ Free access to corporation applications when roaming
◦ Free access to Google Maps
◦ Free access to enterprise messaging systems such as the Jabber® messaging integration platform
MVNO OTT Use Cases
Voice-over-IP OTT Use Case
In this use case, the MVNO’s strategy is to partner with an OTT player such as a voice-over-IP (VoIP) company to
differentiate the company from its competitors.
Business Requirement
MVNOs must to be able to provide QoS on OTT voice and messaging applications in order to differentiate
themselves. To do so, QoS can be based on application-detection mechanisms and API triggers from the OTT
application.
Use Case Description
When an OTT application is detected or a trigger is received from the OTT application, the MVNO provides a
higher QoS, either at the session level or service-flow level, as shown in Figure 13.
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Figure 13. Network Architecture for MVNO OTT Use Cases
In addition to direct QoS use cases, other cases can be implemented, including:
● Voice-level QoS when user is using OTT application for free voice calls
● Zero rate for data usage used for OTT applications on 3G or 4G networks
● Voice over Wi-Fi
● Access Network Discovery Selection Function (ANDSF)
● Auto Wi-Fi selection for MVNO’s Wi-Fi partner or MVNO’s own Wi-Fi infrastructure
● Offload from 3G or 4G to Wi-Fi when user gets good QoS from Wi-Fi (both uplink and downlink)
OTT Gift Transfer Use Case
Another MVNO use case with OTT applications is the opportunity to set up a mobile service wallet, as shown in
Figure 14. The figure shows an example of an OTT application transferring a 500-MB gift to another user.
Figure 14. OTT Application Transfers 500-MB Gift to Another User
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Business Requirement
A mobile service wallet allows users to transfer megabytes from their quota as gifts to other OTT users from the
same MVNO.
Figure 15 shows an example of an OTT application transferring a $20 gift to another user.
Figure 15. OTT Application Transferring $20 Gift to Another User
Use Case Description
Using APIs and Secure HTTP (HTTPS)-based message exchange, you can transfer gifts in the form of monetary
value directly from the mobile wallet using the OTT application.
API Exchange
MVNO Use Case
In this use case, the MVNO serves as the API exchange for the OTT vendors and other applications to control the
QoS of the session during the duration of the application being used.
Business Requirement
To further enhance the OTT strategy of MVNOs, the MVNO partners with the OTT player with a platform that
allows the OTT application to send messages in easy HTTPS format so that it can intelligently exchange
messages, as shown in Figure 16.
Figure 16. Network Architecture for API Exchange
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Use Case Description
The Cisco Policy Suite Application Gateway allows the MVNO to open the interface to OTT exchange messages.
The web services interface allows for fast and easy exchange of HTTP messages between the OTT application
and MVNO. Here are some possible use cases:
● Voice-quality QoS is based on session-start and session-end triggers to the Cisco Application Gateway.
● Users who are on a lower-tier plan are given a higher QoS when they are accessing a video service such as
Netflix.
● Revenue can be shared between the OTT application provider and the MVNO.
Conclusion
In today’s growing mobile market, new MVNEs and MVNOs in the form of mobile operators, enterprises, and OTT
players have found new ways to open monetization opportunities and create new business models. Using the
Cisco mobile network infrastructure equipment, including Cisco Virtual Packet Core and Cisco Policy Suite, MVNE
counterparts can quickly roll out new services with a very low operating cost. At the same time, their MVNO
counterparts find they can differentiate themselves to gain market share and grow profitably.
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