On the Economics of 3G Mobile Virtual Network Operators (MVNOs)

The paper assesses the market conditions and dynamics, the architectures and the different approaches for deployment of 3G Mobile Virtual Network Operators (MVNOs), in an attempt to address specific advantages and pitfalls. Following the definition of appropriate service sets and tariff structures, and taking into account demand scenarios, a techno-economic model has been developed, in order to compute key economic indicators. The paper presents techno-economic results of specific business cases and deployment alternatives for an average “large” European country and a smaller, Nordic-type country. Fixed and variable costs have been identified and the business case shows how different service sets lead to different costs. Different MVNO business profiles have been investigated. Profitability for all scenarios and business profiles has been calculated, presented and discussed. Major opportunities and threats, as well as critical parameters and uncertainties have been identified through sensitivity analysis. Dimitris Varoutas holds Physics degree and M.Sc. and Ph.D degrees in electronics and radio-communications from the University of Athens. He is a research fellow and adjunct lecturer in the Department of Informatics and Telecommunications of University of Athens. He is also an adjunct lecturer in the Department of Telecommunications of the newly founded University of Peloponnese. He has participating in numerous European R&D projects in the RACE I &II, ACTS, Telematics, RISI and IST framework in the areas of telecommunications and Technoeconomics. He is an adviser in several organisations including OTE and EETT (Greek NRA for telecommunications) in the fields of telecommunications, broadband and mobile services, licensing, spectrum management, pricing and legislation. His research interests are optical, microwave communications and technoeconomic evaluation of network architectures and services. He has more than 30 publications in refereed journal and conferences in the area of telecommunications, optoelectronics and technoeconomics. He is a member of IEEE and serves as reviewer in several journals and conferences. Dimitris Katsianis received the Informatics degree and the M.Sc in Signal Processing and Computational Systems from the University of Athens. He is a research fellow in the Informatics Department of University of Athens. He was technical consultant scientific co-operator for Hellenic Telecommunication Organisation (OTE) in networking aspects concerning simulation of ATM networks and Management in an all Optical network, participating in several Eurescom (European Institute for Research and Strategic Studies in Telecommunication) projects. He was consultant in investment analysis projects for OTE Consulting S.A. He was also technical consultant in Telecommunication and signal processing for Space Hellas and technical consultant in Networking Applications for ICL-Hellas. He was participating in several ACTS and IST projects (AC364 OPTIMUM, AC364TERA, IST 25172-TONIC, etc.) as the case study leader for 3G and 4G business cases. He has more than 25 publications in journal and conferences in the field of techno-economics and 3G-network design. Thomas Sphicopoulos received the Physics degree from Athens University in 1976, the D.E.A. degree and Doctorate in Electronics both from the University of Paris VI in 1977 and 1980 respectively, the Doctorat Es Science from the Ecole Polytechnique Federale de Lausanne in 1986. From 1976 to 1977 he worked in Thomson CSF Central Research Laboratories on Microwave Oscillators. From 1977 to 1980 he was an Associate Researcher in Thomson CSF Aeronautics Infrastructure Division. In 1980 he joined the Electromagnetism Laboratory of the Ecole Polytechnique Federal de Lausanne where he carried out research on Applied Electromagnetism. Since 1987 he is with the Athens University engaged in research on Broadband Communications Systems. In 1990 he was elected as an Assistant Professor of Communications in the Department of Informatics, in 1993 as Associate Professor and since 1998 he is a Professor in the same Department. His main scientific interests are Microwave and Optical Communication Systems and Networks and Techno-economics. He is leading about 30 National and European R&D projects (RACE I and II, ACTS, RISI, HCM, COST, Eurescom, etc.) including Synthesis and TITAN. He has more than 80 publications in scientific journals and conference proceedings. He is also a reviewer in journals of IEEE and IEE and auditor and evaluator of RACE and ACTS projects. He is the Chairman of the IEEE LEOS Chapter (Bulgaria, Greece, Romania and Yugoslavia). From 1999 he is advisor in several organisations including EETT (Greek NRA for telecommunications) in the fields of market liberalisation, spectrum management techniques and technology convergence. Kjell Stordahl received his M.Sc. from Oslo University in 1972. He has been at the Research Department Telenor for 15 years; 7 years as a manager of the Teletraffic field. He joined Telenor Networks in 1989 as Chief Planning Manager until 1996. He has been manager of Market analysis in Telenor Networks 1997–2002. Kjell Stordahl was appointed associated reporter and special reporter 1981–1988 in CCITT SGII for “Forecasting International Traffic”. From 1985 to 1988 he participated in CCITT GAS 10 and developed a forecasting handbook. He has also worked for ITU's headquarter as a specialist on forecasting. From 1994 to 1997 he was on the Board of Telenor Consult AS. He was referee for Project Imagine 21 in the ESPRIT Programme 1999–2001. Kjell Stordahl was on the Technical Advisory Board of Virtual Photonics 2000–2002. Since 1992 he has participated in various projects funded by the European Commission: RACE/TITAN, ACTS/OPTIMUM and TERA, IST/TONIC and CELTIC/ECOSYS. Kjell Stordahl has published over 150 papers in International Journals and Conferences.