What Does Network Slicing Mean for 5G MVNOs?

The MVNO model has gained many followers, with brands using mobile to reach customers in different ways. The basics have been in place for more than 20 years – but that’s about to change.

Have you heard about the next MVNO iteration? The Fifth generation MVNO. What does this mean? What opportunities does it present? How can you get ready? Find out in the first of two new briefing papers from Enghouse Networks.

Analysts are telling us that the MVNO market took a ding during the global pandemic, as customer recruitment suffered. But customers also stayed very loyal, as connectivity with colleagues and family became so important. As recovery continues, the MVNO business looks set to resume strong growth in the near and indeed longer future: P&S Intelligence predicts nothing less than a 7.1% CAGR in MVNO income between 2021 and 2031, to reach $140 billion by 2031, for example.

Some of us, though, have identified some deeper reasons for MVNO optimism even before such analyses, though. For instance, back in early June Lebara Mobile extended its MVNO agreement with Vodafone by a further three years. Set up originally as a calling card provider so migrant workers could keep in touch with loved ones back home – it transitioned to MVNO status in 2007.

So far, so familiar: a classic example of a MVNO (a niche service for a defined, ill-served demographic) and a classic example of tech agreement with a network. But what makes this deal interesting to anyone seriously thinking about the future of the MVNO space is that keyword in the headline: ‘5G.’

5G changes a lot of things. Maybe not everything, but a lot. And one of the biggest areas of ‘disruption’ is going to be in the MVNO space. We use that term advisedly – and positively. That’s because 5G-driven disruption equals growth and expansion. Why?

Well, here’s one reason to start with: network slicing (tapped by Ericsson as a “the key to monetising 5G investment” and likely to be a $200 billion opportunity for operators in its own right). With slicing, the door opens for differentiated service propositions in a specific slice. A slice is essentially a virtual network that’s delivered over the same physical network footprint, or in a specific location – and perhaps for a specified time.

This creates a door 5G MVNOs could immediately push open, offering new and interesting content or specialised products, simply because slices can be defined to deliver different – but distinct – networks, each with different performance characteristics, each on the same physical network. So, slicing can enable a huge range of different MVNO propositions to be delivered and for MVNOs to find entirely new ways to differentiate their services.

These services could be around content, or business to business, or to support specific marketing campaigns or entertainment or training experiences, and…and. The list will grow. Basically, identify a need and you could be able to exploit it quickly.

Who will these new MVNOs be? In many cases, they will be today’s, but look for new entrants, and perhaps from surprising quarters, too: purpose-built MVNOs, focused on leveraging the power of 5G to do things like offer industry-specific industrial, retail, or entertainment applications.

Imagine global brands promoting their events with newly immersive AR and interactive capabilities for armchair viewers and ticketholders alike. Or, moving away from entertainment and people, how about new MVNOs for managing IoT services for smart cities? This market is starting to take shape – but to find a way to success, you need to consider all the opportunities that are emerging.