Study on Mobile Virtual Network Operations

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JOURNAL OF COMPUTING, VOLUME 2, ISSUE 12, DECEMBER 2010, ISSN 2151-9617 HTTPS://SITES.GOOGLE.COM/SITE/JOURNALOFCOMPUTING/ WWW.JOURNALOFCOMPUTING.ORG

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Study on Mobile Virtual Network Operations
Md. Whaiduzzaman and Mahmudur Rahman
Abstract— In this paper, Mobile Virtual Network operation has been introduced. A full MVNO consists of a Home Location Register (HLR), Mobile Switching Centre (MSC), Authentication Centre (AUC), and Equipment Identity Register (EIR) and associated signaling capabilities.We analyze the MVNO sector from two perspectives: the factors including the consumer, industry, regulation and technology characteristics and successful MVNOs in various organization for Economic Cooperation and Development markets.The trend of how the MVNO market has changed and what opportunities ,network operators and potential MVNO are likely to face. Different sectors related to implementation of MVNO are working with the GSM technology and the feasibility study of implementation of MVNO in the present world. Index Terms—MVNO, MNO, Virtual Network, GSM

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1 INTRODUCTION
the concept.  "Mobile" refers to the fact that such operators offer services in the mobile market.  "Virtual" means that such an operator does not have its own spectrum allocation or license but instead acquires them from already established Mobile Network Operators (host operator). MVNOs do not have a governmental license to use radio spectrum, but have access to one (or, in theory, perhaps more) of the radio elements of a mobile operator and are able to offer services to subscribers using such elements. At minimum, these radio elements are: The radio transmission link, its control functions and the mobility management functions that keep track of exactly where mobile handsets are located so that calls can be delivered to them; and Some transmission and switching facilities needed to link the radio facilities to the points of interconnection, either with the MVNO's system direct, or with transit network operators.  "Network" means that there is some element provided by the MVNO itself rather than all services being undertaken by the host operator.  "Operator" means that the MVNO appears to the customer as an independent operator in its own right rather than an entity using somebody else's network. Hence putting all these together it appears that MVNO “is a mobile operator that does not own its own spectrum and usually does not have its own network infrastructure. Instead, MVNO's have business arrangements with traditional mobile operators to buy minutes of use (MOU) for sale to their own customers.”

ow a day all over the world mobile communication market has reached its saturation point. As the market has matured, the basic subscription has become a commodity product and the competition is based increasingly on existing subscribers. Until recently, each national market has consisted of only few operators. The two main types of operators are: Mobile network operators (MNOs) providing a mobile network for the purposes of transmitting, distributing, or providing messages and Mobile service operators (MSOs) transmitting messages over a mobile network obtained for use from a mobile network operator. SIM-based mobile services can be offered without owning a radio network or rights to the required radio spectrum. Simultaneously the launch of mobile number portability has decreased switching costs and opened up the mobile communications market to new service providers. This paper studies about the mobile virtual network operators (MVNO), a new type of communication service provider.

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1.1 WHAT IS AN MVNO
MVNO stands for mobile virtual network operator. As mentioned above the MVNO is a new emerging model in telecommunication sector. Secondly, there is unanimous agreement about what an MVNO does not have but there is no consensus about what an MVNO must have. So there is a significant amount of disagreement over what exactly constitutes an MVNO. However, taking each word in turn perhaps provides a clearer understanding of
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 Md. Whaiduzzaman is a Lecturer with the Institue of Information Technology, Jahangirnagar University, Dhaka  M. Rahman is with the Department of Electronics & Telecommunication Engineering, Daffodil International University, Dhaka.

JOURNAL OF COMPUTING, VOLUME 2, ISSUE 12, DECEMBER 2010, ISSN 2151-9617 HTTPS://SITES.GOOGLE.COM/SITE/JOURNALOFCOMPUTING/ WWW.JOURNALOFCOMPUTING.ORG

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MVNO Model has following distinctive features:

1.2 MVNO CONCEPT & TYPES
MVNO is an organization that offers mobile subscriptions in its own brand name, controlling the billing relationship with the customer, but who does not hold its own frequency license in the market. So MVNO, by nature, has to utilize such facilities of the existing mobile network operator as base stations, switching system and radio frequency, etc. MVNO can be distinguished into 4 types by the degree of dependence on MNO’s facilities. The first type, type A, is the simplest pure reseller, as just reselling of the existing MNO’s mobile service to customers with his own brand or MNO’s brand, which is totally dependent on MNO’s telecommunications facilities. The second type is the simple MVNO that hold HLR (Home Location Register) to manage the customer’s information and his own brand but uses MNO’s network code and SIM (Subscriber Identification Module) card. So the type B can provide the value-added service to his own customers although some parts of voice mobile service depend on the MNO. The type C is an MVNO that added switching facilities to the type B. So the type C includes the every feature of B type. Lastly, D type in figure 1 is called full MVNO because the type has almost mobile facilities including switching, transmission without radio frequency and some base transmission stations. Thus, the type D is the most independent operator among 4 types, which can provide mobile services including the several value-added services to his own customers with independent marketing strategies such as pricing, brand, SIM card, etc. In the 4 type cases of real world, the wholesale compensation for using MNO’s facilities has been usually calculated by cost base, or retail-price base.

1. 2. 3. 4. 5. 6. 7. 8.

It has its own mobile network code Issue its own SIM cards Operate its own mobile switching centre (MSC) Operate its own home location register (HLR) Operate its own billing platform Independent pricing Independent billing Independent Marketing

Category II: Skinny/Service provider MVNO: Such MVNOs rely almost totally on the mobile operator's facilities. Normally such MVNO just re-sells minutes43 acquired in bulk from the MNO and do not possess its own brand name. Calls to and from these MVNO subscribers would be treated as if they were calls to the mobile network operator's own customers. Similarly, the MVNO does not have its own codes/ numbers instead the numbers of MNOs are used. Further, the MVNO does not have its own SIM rather uses the SIMs of MNO. 2.1 NETWORKS & ARCHITECTURES

Figure 2.1: Illustration of a MVNO network

1.3 DIFFERENT CATEGORIES OF MVNOS Category I: Plump/Full MVNO: MVNO own its brand
name, numbering series, billing system, SIMs, some network infrastructure like IN, HLR and even MSC. The MVNO does not own spectrum and therefore, uses radio network of MNO under business agreement for provision of services to its customers. In this category, the MVNO seems like a full fledged mobile operator and public can not differentiate in the MNO and MVNO. This category of MVNO operates under a license granted by the respective regulator and is bound by the license conditions similar to MNO. This category of MVNO is usually operating in fully mature markets where there is sufficient competition and the growth is almost flat. The MNOs have sufficient spare capacity to sell in bulk to MVNO and thus earn some revenue, whereas the MVNO adds value to it and re-sell it in the market with its own brand name. In short this full

A mobile virtual network operator provides cellular services without owning spectrum access rights. From the customers' point of view, a MVNO looks like any other cellular operator, but a MVNO does not own or operate base station infrastructure. The above figure illustrates the MVNO idea. There are different scenarios for a MVNO approach and consequently different Architectures for the MVNO such as:  A full MVNO, with its own SIM card, network selection code and switching capabilities as well as service center but without spectrum. IA-MVNO (Indirect Access MVNO) or Enhanced service provider without SIM card, but with own core network (circuit switched and/or packet) and service facilities, e.g. own IN or IP application servers. Wireless ISP without own core network; basically an Internet portal providing wireless IP services.





JOURNAL OF COMPUTING, VOLUME 2, ISSUE 12, DECEMBER 2010, ISSN 2151-9617 HTTPS://SITES.GOOGLE.COM/SITE/JOURNALOFCOMPUTING/ WWW.JOURNALOFCOMPUTING.ORG

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2.2. BACKGROUND ARCHITECTURE
The following Figure is a diagram of a typical Global System for Mobile Communications (GSM) network that was used in the initial consultation, and it is included here to help clarify the discussion below.

2.2.2.1 BASE STATION CONTROLLER (BSC)
The BSC is the central network element of the BSS and it controls the radio network. The base station controller (BSC) provides, classically, the intelligence behind the BTSs. Typically a BSC has tens or even hundreds of BTSs under its control. The BSC handles allocation of radio channels, receives measurements from the mobile phones, and controls handovers from BTS to BTS. The BSC is undoubtedly the most robust element in the BSS as it is not only a BTS controller but, for some vendors, a full switching center, as well as an SS7 node with connections to the MSC and serving GPRS support node (SGSN) (when using GPRS). It also provides all the required data to the operation support subsystem (OSS) as well as to the performance measuring centers.

2.2.2.2 BASE TRANSCEIVER STATION (BTS)
Figure 2.2: Diagram of a Typical Mobile Virtual Network (MVNO)

An MVNO is an organization which provides mobile telephony services to its customers but do not have an allocation of spectrum. The MVNO must use part of the MNO’s network in order to provide services. The extent which the MVNO would use the network elements of the MNO. Most proponents of MVNOs indicated that there was the most interest in ‘full MVNOs’. A full MVNO is one with a Home Location Register (HLR), Mobile Switching Centre (MSC), Authentication centre (AUC), Equipment Identity Register (EIR) and associated signaling capabilities. A Subscriber Identity Module (SIM) card controlled by the MVNO is recognized as a key requirement of an MVNO. The MVNO would probably also require an Intelligent Network (IN) platform if it wished to provide its customers with its own value-added services rather than relying on those available from the host MNO.

The BTS is the network element responsible for maintaining the air interface and minimizing the transmission problems. The BTS parameters handle the following major items; that kind of hand offs (when and why), paging organization, and radio power level control and BTS identification. The BTS has several very important tasks, some of which are presented in the following. Air interface, signaling, Ciphering, Speech processing

2.2.2.3 TRANSCODER (TC)
The transcoder is responsible for transcoding the voice channel coding between the coding used in the mobile network, and the coding used by the world's terrestrial circuit-switched network, the Public Switched Telephone Network.

2.2.3 NETWORK SWITCHING SUBSYSTEM (NSS)
The Network Switching Subsystem (NSS) contains the network elements MSC, VLR, HLR, AUC and EIR The main functions of NSS are: Call control Charging, Mobility management, Signaling Subscriber, data handling

2.2.1 MOBILE STATION (MS)
The Mobile Station (MS) is a combination of terminal equipment and subscriber data. The terminal equipment as such as is called Mobile Equipment (ME) and the subscriber’s data is stored in a separate module called Subscriber Identity Module (SIM)

2.2.3.1 MOBILE SWITCHING CENTER (MSC)
The MSC is responsible for controlling calls in the mobile network. It identifies the origin and destination of a call, as well as the type of a call. An MSC acting as a bridge between a mobile network and a fixed network is called a Gateway MSC. The MSC is responsible for several important tasks, such as: Call control Initiation of pagin and Charging data Collection

2.2.2 BASE STATION SUBSYSTEM (BSS)
The base station subsystem is responsible for managing the radio network, and it is controlled by an MSC. Typically, one MSC contains several BSSs. A BSS itself cover a considerably large geographical area consist many cells (a cell refers covered by one or more frequency resources). The BSS consist of the following elements: BSC (Base Station Controller) BTS (Base Transceiver Station) TC (Transcoder)

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2.2.3.2 VISITOR LOCATION REGISTER (VLR)
Visitor Location Register is integrated with the MSC. VLR is a data base which contains information about subscribers currently being in the service area of the MSC/VLR, such as: Identification number of the subscribers. Security information for authentication of the SIM card and for ciphering . Service that the subscriber can use. The VLR carries out location registrations and updates. It means that when a mobile station comes to a new MSC/VLR it must register itself in the VLR, in other word perform a location update. The mobile station located in the own network is always registered in a VLR.

works required for authenticating and ciphering mobile calls. The original concept was that a subscriber would be able to use different phones on his/her subscription, rather than being tied to one particular phone.

2.3.2 CAMEL-IN
Customized Applications for Mobile Network Enhanced Logic (CAMEL) represents the attempt of the GSM standardization community to implement Intelligent Network (IN) technologies in mobile networks. The main concept of IN being the flexible implementation of services in public networks. This is done by having basic call functions within the MSC/ GMSC and having the intelligent service control functions in a centralized location which is connected to all the MSC/GMSC. It is recognized that another benefit is to the services offered to roaming customers from another network. When a subscriber roams his/ her service profile is transferred from the home network to the host one. This contains a profile of the value added services available on the roamer’s home network. Subject to commercial agreement between the two networks and the services being available on the host network, these will be available to the roamer. But they are the host network’s implementation, and as such may appear ‘different’ to the roamer. That is different key sequences are required to access them. With CAMEL-IN the host network is only responsible for basic call processing, the extra intelligence to provide value added services resides in the home network. This means that each call relies on intelligence from the home network, and will need the home networks participation on a call by call basis.

2.2.3.3 HOME LOCATION REGISTER (HLR)
HLR maintains a permanent register of the subscribers, for instance subscriber identity numbers and the subscriber services. In addition to the fixed data, the HLR also keeps track of the current location of its customers. As we will see the MSC asks for routing information from HLR if a call is to be set up to a mobile station. Authentication center (AC) and equipment Identity Register (EIR), are located in the HLR.

2.2.3.4 AUTHENTICATION CENTRE (AC)
The Authentication Center provides security information to the network, so that we can verify the SIM cards (authentication between the mobile station and the VLR and cipher the information transmitted in the air interface between the MS and the Base transceiver station). The Authentication Centre supports the VLRs work by issuing so called authentication triplets upon request.

3.1 CALL GENERATION PROCESS OF AN MVNO
Though MVNOs provide mobile voice and data services without owning the access rights to the spectrum they use. Consequently, MVNOs can be described as a subgroup of MNOs. The radio capacity used to provide these services is gained through commercial agreements with licensed mobile network operators (MNOs). MVNOs are a new GSM phenomenon. MVNO have its own brand name and number. So MVNO has its own subscriber identity module (SIM), which is memory device that store information such as the subscriber’s identification number, the networks and counties where the subscriber is entitled to service, privacy keys, and other user-specific information a subscriber. The ID number of the SIM is given by the MNO or GSM network from where the MVNO leased the frequency. The ID number can be different from the MNO’s number. With out SIM installed all MVNO mobile are identical and no operational. It is the SIM card that gives subscriber units their identity.

2.2.3.5 EQUIPMENT IDENTITY REGISTER (EIR)
As for AC, the Equipment Identity Register (EIR) is used for security reasons. But while the AC provides information for verifying the SIM cards the EIR is responsible for IMEI checking. When performed the mobile station is requested to provide the International Mobile Equipment Identity (IMEI) number. This number consists of type approval code, final assembly code and serial number of the mobile station.

2.3 TECHNOLOGY ENABLERS
2.3.1 SIM TOOLKIT
SIM toolkit is the GSM implementation of intelligent SIM cards in mobile networks. SIM Toolkit offers extra functionality than is available in older GSM SIM cards. Initially SIM cards were in effect ‘slave’ units within the handset. They provided information when the handset or network required it, and stored information that the net-

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When a MS made a call, it goes to the GSM network then the GSM network operator transmits the call to the receiver.

over the cost of calls coming in to and going out from its subscribers. It also means it controls its own service creation rather than relying on one operator to give it with services.

3.4 MVNO BUSINESS MODELS
The different business models in the MVNO market are based on how the value chain is restructured. Therefore, four main business models that emerge are: Branded Reseller, Light-MVNO, Full-MVNO and Network enablers. Branded reseller is the lightest MVNO business model, where the venture just provides its brand and, sometime, its distribution channels. While the mobile network operator (MNO) provides the rest of the business, from access network to the definition of the mobile service offer. Full-MVNO is the most complete model for a new venture, where the mobile network operator just provides the access network infrastructure and, sometimes, part of the core network, while the new venture provides the rest of the elements of the value chain. This MVNO business model is typically adopted by telecom players that could gain synergies from their current business operation. Light-MVNO is an intermediate model between a branded reseller and a full-MVNO. This model allows new ventures to take control of the marketing and sales areas and, in some cases, increase the level of control over the back-office processes and valued-added services definition and operations.

Figure 3.1: Call generation from a MS

So here we can see when a subscriber made a call from a MVNO mobile device MS make a connection with the GSM network of the MNO. So the transmission of the call depends on the GSM network operator.

3.2 ECONOMIC SIDE OF MVNO MODEL
The main source of income derives naturally from the customers. The customers pay for call connection and services. The second source of income can be the interconnection payments from other operators. But, in order to succeed an MVNO must be able to provide innovative services since this is a unique source of income that it controls totally. On the cost side, the MVNO has to pay to the MNO for both outgoing and incoming calls. In addition, it may need to pay interconnection payments to other operators for completing outgoing calls. Last, but not least, it has also investment, marketing and operational costs. An MVNO needs to reach commercial agreements with a MNO concerning the charging for access to the radio spectrum.

4. ADVANTAGES
Advantages that MNO could have by giving access to MVNO’s are as follows: By selling the network capacity to one or several MVNO’s can bring new subscribers and traffic into the network hereby broadening the customer base of incumbent operators at zero cost of acquisition. Selling of the capacity is also an efficient way to share the network costs. MNO’s rather than resisting the whole sale market if they embrace the whole sale market by leasing out their IT service. This certainly supports retailers (MVNO’s) but retailers brand can take them to where MNO’s themselves can’t go. Further, MVNOs may bring ready-made retail distribution networks and online channels and the ability to leverage experience and customers from other businesses.

3.3 DISTINCTIVE FEATURES OF AN MVNO
Although there are many approaches applied while defining MVNO’s; but the key point that is common in all is that they use a completely separate product. Therefore, an MVNO requires a distinct brand, so that the customer feels as if he or she is using a completely separate network. It also means MVNOs can profit from a greater proportion of airtime charges incurred by subscribers, provide related value added services (insurance, accessories) as well as premium subscription services. It differs from the classic reseller model where resellers buy minutes in bulk and do not go much beyond delivering the same services as the one offered by the network operator at a more competitive price. There is another characteristic that distinguishes MVNOs from simple resellers. It is indeed not that they issue a SIM card – the small slot-in card that defines the unique identity of a mobile handset. No, the factor that makes an operator truly virtual is the capability to control both outbound and inbound calls. Essentially, this means at least owning its own switch. This means it then has control

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4.1 WHERE ARE THE OPPORTUNITIES
The main business rational to launch an MVNO can be summarized in: 1. Access to current customer base 2. Ability to deliver a differentiated value proposition and 3. Potential synergies with existing business. Therefore, the introduction of the MVNO model brings opportunities to different types of players that can put together one or more of these elements. Companies that have a captive customer base are able to develop an MVNO business. These companies can lever not only its brands awareness among their customers, but also their distribution channels to sell mobile services to their current customers. These companies should consider the mobile service as a new product of their current product portfolio or, inclusively, in some cases, as a new private label. Additionally, companies that serve or sell products to niche market are able to develop an MVNO business. These companies normally have an exclusive and non-replicable content and value added services that can strengthen the mobile service value proposition. Value added MVNOs have levered their existing brand, taking advantage of a strong brand value and awareness. Their value propositions are normally developed with differentiated and exclusive content and services. Their offering is typically oriented to specific segments such as budgeters with low spending power.

References
[1] [2] htpp://en.eikioedia.org./wiki/history_of_mobile_phone www.mortricity.com/pdf/mvno/motricity_MVNO_withepap er_nov2005.pdf [3] htpp://www.mobiliein.com/what_is_a_mvno.htm [4] htpp://about.virginmobile.com/about/us/background [5] htpp://www.answers.com/topic/mobile-virtual-network-operator [6] htpp://wwwtakashimobile.com/MVNO.html [7] Wierless communications principles and practice by theidor s.rappaport [8] Economic validityof 3G mobile virtual network operators Varutas,D. Katsianis, Th Sphicopouslos (University of Athens) [9] htpp://www.ofcom.org.uk/consult/condocs/sfr/sfr2/sfr.pdf [10] htpp://www.itu.int/osg/spu/ni/3G/workshop/presentations/lewi n_1.pdf

Md. Whaiduzzaman Completed his BSc in Electronics & Computer Science from Jahangirnagar University, Dhaka and MSc in Telecommunication and Compter Networking Engineering from London, UK.He is a member of IEEE and British Computer Society.

Mahmudur Rahman has completed his BSc in Electronics & Telecommunication Engineering from Daffodil Inernational University, Dhaka

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CONCLUSION

Mobile Virtual Network Operator (MVNO) is a GSM phenomenon where an operator or company which does not own a licensed spectrum and generally without own networking infrastructure. Instead MVNOs resell wireless services under their brand name, using regular telecom operator's network with which they have a business arrangements. Usually they buy minutes of use from the licensed telecom operator and then resell minutes of usage to their customers of MVNO. In this paper, we have studied about MVNO, its types, concepts, network architectures, how it use GSM networks, feature, strategies, business models. We have a great opportunity for establishing a MVNO network in our country. This will be profitable for MVNO operators, MNOs and the subscribers as well.

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