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Print this ArticleMobile Virtual Network Operator – MVNO (Turkey)
30 Nov 2010 by admin in 1-FEED, Feed, MVNO, Turkey / No Comments
The PrepaidMVNO site has been provided a English translation, of a Post by Dr. Barış Bulut,General Manager at Veriser for his article on Turkey’s MVNO status, and his presentation at the MVNO Summit.
Where are we as Turkey In the so called Mobile Virtual Network Operator (MVNO) business which we see quite a few examples of in developed countries?Fixed telephony services (back in 2004 called long distance telephone services) which was under legal monopoly until the beginning of 2004, was then opened up to alternatives other than the incumbent. Millenicom and TurkNet were two examples of such alternatives. Well, what is an MVNO?
MVNO Definition:
Although not in every single aspect, but most probably in many aspects, in Turkey we are likely to see a transformation in the mobile services domain – a transformation perceivably similar to the transformation we saw since 2004 in the fixed telephony services domain. In other words, other than what basically a mobile telephone operator (in Turkey, Turkcell, Avea and Vodafone) have the right to frequencies to provide mobile communications, MVNO operator should be able to establish any kind of telecommunications infrastructure and provide all the services the main operator can offer.
Just like MVNO stands for the virtual operator, the main operator can be abbreviated as the MNO by simply dropping the letter “V”, which stands for Virtual.In total, the main operator (MNO) can do the following:
1. Frequency (spectrum), the base station – BTS
2. Radio network (BSC, MSC, HLR, VLR, AUC, EIR, GGSN, SGSN, IN, SMSC, MMSC, …)
3. Operational Support Systems – OSS, business support systems – BSS, Billing – Billing, Invoicing – Invoicing, Collections, Customer Service
4. Branding, marketing and distribution activitiesIn this case, MNO can do these all and MVNO can do up to all except the first one.
When we look at it structurally, only performing the actions listed in item 4 refers to a branded reseller and this requires the minimum upfront investment and is the minimum an MVNO has to do.In the structural sense, in Turkey, the so called pre-MVNOs FenerCell, GSMobile, Trabzoncell, Kartalcell, Basicell, Uğurcell, İstanbulcell, VIPCell and finally TTNet Mobil all come under this category – with one exception for TTNet Mobile where the billing and collection in is performed by TTNet, whereas in other it is done by the MNO. Whilst the subscriber numbers are not publicly reported, these brands have attracted s total of around 750 thousand subscribers.
On the other hand, as MVNO assumes more of the functionalities among items 2, 3, and 4, functional capability-wise it gets closer to an MNO. The highest level is called the full MVNO.
These different functions can be viewed in Figure 1.
Press Image To Zoom
Figure 1: MVNO LevelsRegulations:
MVNO licences are being issues since Q2 2009. However, note that all the aforementioned MVNO brands with the exception of TTNet Mobil are run under revenue sharing partnership model, not under MVNO licence (hence they do not have MVNO licences). There is a long way to go in terms of regulations to have proper MVNOs in Turkey particularly to incorporate items 2, 3 and 4 above.
Still, what can we expect from the future from an optimistic viewpoint? Let us have a look:Where can the MVNO business go in Turkey?
Based on the existing foreign examples, typically for retail chain stores, holding companies, professional associations, transportation companies, banks and fixed line telecom operators, being a Mobile Virtual Network Operator is a possibility. To name a few names, we can refer to Figure-2. Note that this figure is more representative than exhaustive.Press Image To Zoom
Figure 2: Possible MVNO segments and examples in these segments in Turkish market. The right-most column is the list of the current MVNOs.Therefore, the grocery store you go to 5-6 times a month, the giant home store you often shop from, the national or international air travel company you use, your favourite petrol station you fill up your car at 2-3 times per month, your bank, or your existing phone & ADSL service provider will be able to sign a contract with you with their own mobile brand, provide their own branded SIM card, and maybe bundle in a handset. Since you already have an ongoing relationship with these companies, they already know you well and can tailor offers to better suit your needs.
Conclusions:
Although the MVNO licences in Turkey are available since Q2 2009, the results show that it has not been successful so far. An MVNO market has not been formed in the past 1.5 years. The definition of success here is simply to have a company apart from an existing MNO offering mobile services.
I expect that year 2011 will be the year of struggles to make the relationship between the Regulator-MNOs-MVNOs work. And despite hardships, I anticipate some changes in the MVNO market in 2011 and 2012.
The Editor would like to thank Dr. Barış Bulut, Business Development and Strategic Planning Manager at Millenicom for his contribution and assistance for the Creation of this post.If you would like to Email Dr. Barış Bulut, please use the following EMAIL
Millenicom Turkey is providing pre-selection telecommunications services to more than 55,000 corporate customers and expanding at a high rate within new customers. The Company, who realized Turkey’s first Call by Call service in September 2007, gives all its users the opportunity to make calls with high sound quality with its advantageous tariffs. 1045, which scored a unique success with its over 2.000.000 users in a short time, keeps its leadership in the market. It is also the first company in Turkey who presented calling cards and call shop businesses. Millenicom Turkey has entered ADSL market in May, 2009 with “Doping ADSL2+” which has its own infrastructure, and reached more than 35,000 subscribers. Millenicom Turkey presents uninterrupted, high quality and economical telecommunication solutions across our country with its investments. Over the network of Millenicom Turkey, over 2.5 billion minutes of talk yearly can be thanks to made. Millenicom Turkey, having interconnections with over 80 telecom operators worldwide, can present its unchallenged sound quality to all its customers.
Image Credit: Barış Bulet, Presented at MVNO Summit, Barcelona 2010
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