- Discount MVNOs provide cut-price call rates to market segments. Discount MVNOs include Virgin Mobile and EasyMobile. Their strategy is based on cheap prepaid or postpaid tariffs with basic voice and SMS services.
- Lifestyle MVNOs focus on specific niche market demographics. MVNOs such as Boost Mobile and AMP'D in the US, and Hello_MTV and ID&T Mobile in Europe, market entirely to young users.
There are three primary motivations for mobile operators to allow MVNOs on their networks. These are generally:
- Segmentation-Driven Strategies – mobile operators often find it difficult to succeed in all customer segments. MVNOs are a way to implement a more specific marketing mix, whether alone or with partners, and they can help attack specific, targeted segments.
- Network Utilisation-Driven Strategies – Many mobile operators have capacity, product and segment needs, especially in new areas like 3G. An MVNO strategy can generate economies of scale for better network utilisation.
- Product-Driven Strategies – MVNOs can help mobile operators target customers with specialised service requirements and get to customer niches that mobile operators cannot get to.
MVNO models mean lower operational costs for mobile operators (billing, sales, customer service and marketing), help fight churn, grow ARPU by providing new applications and tariff plans, and can also help with difficult issues like how to deal with fixed-mobile convergence, by allowing MVNOs to experiment with more experimental projects and applications. The opportunity for mobile operators to take advantage of MVNOs generally outweighs the competitive threat.