5G and IoT will transform Asia’s MVNO game

MVNO
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Mobile virtual network operators (MVNOs) are playing an increasingly important role in the telecoms industry. ITU News recently caught up with Sasaki Futoshi, deputy general manager, strategy and business development, MVNO at Internet Initiative Japan (IIJ), about the state of play for MVNOs in Asia, and why 5G and the IoT present new challenges and opportunities.

What are the opportunities of expanding MVNOs in Asia?

Sasaki Futoshi, deputy GM, strategy and business development, MVNO, at IIJ

Asian MVNOs have established or are establishing strong domestic market positions to deliver unique and cost-efficient services to their customers. Adding to this, from the international point of view, there are a lot of opportunities for Asian MVNOs as the trans-Asian movement of people and products increases.

Asian mobile markets are quite huge and are full of variation. Japan, South Korea, China, Hong Kong and ASEAN countries all have different mobile market landscapes. This variation and diversity could not be supported by the effort of mobile network operators, which are essentially domestic beings, contrary to MVNOs, which have a little asset binding to land.

We Asian MVNOs have new opportunities to provide international services, both for people and for the Internet of Things (IoT), as well as to provide existing domestic services.

What are the benefits of increased connectivity?

Mobile phones are already in the hands of people, and people are always connected. But mobile phones, even smartphones, are merely for connecting people – phone calls, emails, etc, are only connecting one person to another. But low-power wide-area (LPWA) and 5G technologies enable the connection of ‘things’ to each other. Those technologies have the potential power to change people’s lives, thinking and even culture.

Also, it has to be noted that it is very hard for the telecom sector to accomplish these makeovers by itself. Despite telecom operators’ increased use of the Internet, telcos’ nature to connect one person to another has changed little from the age of [Alexander] Graham Bell.

In the upcoming IoT era, the cooperation between telcos, including MVNOs, and the companies that have a fundamentally different mindset from telcos is the only way to make innovation possible.

What are the challenges of the 5G era for MVNOs and how might they be overcome?

Before 5G, an MVNO’s typical distinction is in how much the network facilities are operated by MVNOs. If they operate none of the network facilities, they are called “light MVNOs” or “wholesalers”. If they operate much of the network, they are called “full MVNOs”.

5G network architecture, however, is characterized by virtualization, and all will go beyond the horizon of virtualization. Like a cloud, one MVNO might operate all networks figuratively, while at the same time they might operate no networks literally.

In the 5G era, MVNOs could utilize the host operator’s mobile network to build their own business, the same as they did before 4G – however, it might be the virtualized core network, called the “slice.” Network functions virtualization (NFV) and slicing could be inevitable for many MVNOs in the 5G era.

From this perspective, we also have to look for new and unprecedented relationships with our host operators.

What would you like to see out of regulatory environments?

The role of regulation is quite sensitive for fostering a healthy MVNO industry. In some markets like Japan, unfortunately, MVNOs are not spontaneous businesses that can be easily created. So a clear and decisive will of regulators to introduce competition to the telecom market might be necessary.

At the same time, the most important thing is encouraging innovation, and strict regulation often suppresses imagination.

The best regulations could vary not only by country or region, but also by the stage of the MVNO industry’s development.

How has IIJ contributed to the mobile market?

IIJ was founded in 1992 as the first Japanese internet service provider. Today IIJ is one of the leading telecommunication service providers in Japan. IIJ provides comprehensive network services – not only fixed Internet access, but also data centers, cloud services, outsourcing, applications and mobile business as an MVNO.

IIJ’s MVNO was the first Japanese MVNO to support the 3G network in 2008, the first MVNO to support the LTE network in 2012, and the first full MVNO, which is a virtual operator with its own mobile core network and own mobile network code (MNC).

IIJ has three different customer segments: consumers, business customers, including machine-to-machine (M2M) and IoT applications, and partner MVNOs, in which IIJ plays the role of a mobile virtual network enabler (MVNE), which provide network infrastructure and related services to MVNOs.

IIJ is hosted by NTT DoCoMo and KDDI, and its total number of subscribers exceeded 2 million in 2017.

The original version of this article first appeared on the ITU Telecom World blog and on ITU News

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