Why Mobile Virtual Network Operators (MVNO) should migrate and build onto AWS

Over the years the number of Mobile Virtual Network Operators (MVNOs) has grown worldwide. The MVNO market is valued at US$ 70.3B in 2022 and projected to reach US$ 147.7B by 2032. This growing market is not only an opportunity for MVNOs, but also a challenge, as it is becoming a more and more competitive market.

MVNOs are different from Mobile Network Operators (MNOs) because they do not own radio frequency and, at best, partially own the network infrastructure on which they offer their services. MVNOs enter in an agreement with an MNO to have access to their network. In this document we focus only on the mobile business, but similar considerations can be applied for fixed broadband. Regardless of the type of MVNO, they are primarily a customer-facing business that only succeeds if it can target specific customer segments better and more efficiently than its host MNO or competiors. To achieve this, MVNO operations must be lean, and keep costs to a minimum, while reducing time-to-market.

In the same way MVNOs do not own and operate the wireless infrastructure, outsourcing their IT infrastructure helps reduce operational cost and focus their resources on business by differentiating tasks. Running an MVNO on-premises means guessing capacity and generally overprovisioning, big upfront investment in infrastructure, focusing on tasks that do not provide competitive advantage, security challenges, low levels of automation, high cost for innovation, and infrastructure resilience challenges. On top of this, if MVNOs want to become full MVNOs or enter new markets, then it requires a lot of time and investment. All of these challenges that on-premises solutions bring with them are not aligned with the goals of MVNOs we highlighted previously.

The goal of this post is to highlight how MVNOs can benefit from partnering with AWS to answer the business challenges highlighted previously: be lean, be cost-effective, and cut time-to-market while innovating. We can break down these challenges into seven topics.

Stop guessing capacity and no up-front investments

AWS provides customers with the ability to access resources as needed and release resources when you no longer need them. Furthermore, you can do this automatically so you can stop guessing capacity. AWS allows MVNOs to scale out and scale in, as well as scale up and scale down based on the real capacity required, within minutes. If we look at serverless technologies (native cloud applications), these are going even further. Serverless automatically adapts capacity to customer demand via the paying-for-value billing model, where utilization is automatically optimized and you never pay for over-provisioning. With serverless you can scale from zero to peak demands. For example, MVNOs can build their web portal that scales based on the number of requests so they can meet customers’ demands automatically while providing great performance. If only a user is browsing the MVNO website, then the MVNO would pay for the costs associated with one user activity. Once again, if more requests are to come, then the website can scale and the MVNO would pay based on the load generated by user activities. Of course, Serverless is only one example and may not be applicable to all layers of the stacks. In that case, the flexible pricing models (RI, Saving Plans) and AWS innovation – through services like AWS Graviton instances, managed services, and so on – still provide no upfront investment options. This optimizes the TCO as well as efficient operations.

Another benefit example for MVNOs is Amazon Connect, an easy-to-use, scalable, flexible and machine learning (ML)-powered cloud contact center. MVNOs must operate a contact center to support their customers. Setting up and operating a contact center on-premises can require upfront investment, may lack scalability and can take a long time. MVNOs can use Amazon Connect as Vodafone did (more information), an example of an easy-to-use omnichannel cloud contact center that scales automatically. Furthermore, it integrates artificial intelligence (AI) and machine learning (ML) to better understand their customers while improving agent productivity and in a few clicks, MVNOs can start using the contact center on a pay-per-use basis. In accordance to Forrester Total Economic Impact™ Study, Amazon Connect offers up to a 241% ROI over other contact center technologies. Moreover, MVNOs can integrate Amazon Connect with a chat bot and serverless technologies from AWS to offload some tasks from agents to maximize their productivity. For example, if an MVNO starts receiving calls regarding a specific topic, then they could easily add a messaging function decrease the number of calls handled from call center agents.

In general, AWS lets MVNOs shift responsibility for undifferentiated heavy lifting to AWS. If we look at most companies running on-premises infrastructure, to get a server typically takes 10 to 12 weeks (sometimes longer), and then customers must configure the previous layer, such as OS or database engines. In the cloud, customers can provision thousands of servers in minutes and access over 200 services that they can put together and use however they want. This would allow an idea to reach implementation several orders of magnitude faster. For example, in AWS if you want to set up a Kubernetes cluster, then you can leverage our managed service called Amazon Elastic Kubernetes Service (Amazon EKS) and have an up-and-running newly created Kubernetes cluster within a few minutes. Setting up a cluster or provisioning underlying hardware is not a business differentiator for MVNOs, while the application running on top of it is.

Cost optimization

AWS enables MVNOs to take control of cost and continuously optimize their spend, while building modern, scalable applications to meet your needs. With AWS, they can stop guessing capacity and scale your infrastucture based on their load to pay-as-you-grow.

Our pricing philosophy is to work relentlessly to take cost out of our own cost structure and to pass those savings back to our AWS customers in the form of lower prices. In AWS we have lowered our prices 115 times since AWS launched in 2006 (as of April 7, 2022). For example, VOO decreased TCO for Database Environments by 30% by moving to AWS. We are also offering tools and best practices to help customers constantly optimize their spending on AWS, such as AWS Trusted Advisor or AWS Compute Optimizer. Another example, focusing specifically on BSS, this post explains how to optimize costs for BSS workloads. However, cost optimization does not only mean infrastructure cost, but also reducing the TCO. The more cloud native MVNOs can become this, then the further the cost can be optimized, such as how Deloitte demonstrates in this study.

Software as a Service and AWS Marketplace

To decrease management costs and simplify operations, another benefit of using AWS is to leverage Software as a Service (SaaS) solutions from our partners running on AWS. It is possible to find plenty of literature about the benefits of SaaS, such as scalability, cost efficiency, time-to-market, faster release cycle, and so on. All of these benefits help our customers and especially MVNOs reach their goals. For example, full MVNOs that are running their mobile core platform or are considering running their own core network can engage with our partner wgtwo that offers an SaaS Core Network on top of AWS. Another example is if MVNOs want to build a new BSS platform, then they can consider Amdocs SaaS BSS on AWS, CSGi Ascendon, CSGi Encompass CPQ, and Totogi charging system. These SaaS solutions are all available on the AWS Marketplace. AWS Marketplace makes it easy for customers to find, buy, deploy, and manage software solutions, including SaaS and others. CSPs can easily procure and provision solutions from our partners like Soracom, 5Gsting, Kx, Bryte Systems, Acumatica, Cisco, Cloudwick, Adobe, Zoura, Zendesk, and so on. MVNOs would benefit from a simpler procurement process and a single billing system which simplifies operations for MVNOs and thus further reduces the time-to-market.

Security and compliance

MVNOs, like any other business, must make sure they are secure. On one side they must protect their business, while on the other they must make sure to protect their customers. Using AWS, MVNOs gain the control and confidence they need to securely run their business with the most flexible and secure cloud computing environment available today. As an AWS customer, MVNOs benefit from AWS physical infrastructure and a network architected to protect their information, identities, and applications. With AWS, MVNOs can improve their ability to meet security and compliance requirements, such as data residency, GDPR compliance, protection, and confidentiality with the comprehensive services and features. AWS is backed by a deep set of cloud security tools, with over 300 security, compliance, and governance services and features. In addition, AWS supports 98 security standards and compliance certifications, including: PCI-DSS, HIPAA/HITECH, FedRAMP, GDPR, FIPS 140-2, and NIST 800-171. These help satisfy compliance requirements for virtually every regulatory agency around the globe. All customers benefit from AWS being the only commercial cloud that has had its service offerings and associated supply chain vetted and accepted as secure enough for top-secret workloads.

All of these tasks are quite time and resource consuming to achieve on-premises, while each customer can benefit from utilizing AWS. Security and Compliance is a shared responsibility between AWS and the customer. However, if customers rely more on managed services or serverless technologies on AWS, then the responsibility for security shifts more from the customer to AWS. This lets them be lean, require less resources, and lower the TCO. Find more information here.

Innovation

With long cycles of resource provisioning, as mentioned before, innovation can become slow and very expensive. The possibility of having access to resources within minutes – not only virtual machines but also fully functional and configured advanced services like AI/ML, Internet-of-Things (IoT), DBs, etc. – lets customers test ideas more often and faster. Moreover, AWS continues innovating on behalf of customers and invents entirely new technologies which allow customers to transform their business. For example, in 2014 AWS pioneered the serverless computing space with the launch of AWS Lambda, which lets developers run their code without provisioning or managing servers. As well, AWS built Amazon SageMaker, a fully managed ML service that empowers everyday developers and scientists to use ML without any previous experience. AWS also delivers custom-built chips and processors to give customers better price performance for their applications. All of this is very difficult to achieve on-premises, especially because once AWS launches a new service, it is immediately available for customers to use and explore. As mentioned previously, by leveraging AWS managed services, serverless technology, operations as code, and cloud automation, it is possible to focus on products and differentiators that deliver value to the market rather than focusing on undifferentiated heavy lifting (e.g., data center operations). As Steve MacDonald, Chief Operating and Technical Officer at giffgaff, a UK MVNO, explained, “When we began to adopt AWS, we were able to turbocharge our development lifecycle by focusing on innovation rather than wasting time on maintenance. It’s such a powerful capability for a digital-native business like ours.” In AWS, MVNOs can also apply AI/ML to customer churn retention, forecast data utilization, having an Intelligent Fraud Monitoring system, or International Roaming Fraud Monitoring in a few minutes and with just a few clicks. AWS AI Services easily integrate with applications to address common use cases, such as personalized recommendations (mobile plans), modernizing your contact center, and increasing customer engagement. Because we use the same deep learning technology that powers Amazon.com and our ML Services, MVNOs get quality and accuracy from continuously-learning APIs. And, best of all, AI Services on AWS don’t require ML experience, which can be expensive to get from the highly competitive market.

Automation

Automation is very important for lowering costs and reducing time-to-market. In AWS you interact with services through APIs, which means that tasks can be automated. Customers can not only monitor, interact with, and deploy Infrastructure-as-Code (IaC), but also automate critical business process. Cloud automation is what drives better availability, cost management, governance, and time-to-delivery. Rather than growing bigger teams or adding many tools, building an automation framework gives you far greater benefit for much less effort. Therefore, whether an MVNO chooses to build an automation team in-house or outsource it to a next-gen service provider, it should be at the top of MVNO’s priority lists and AWS allows this.

Global Reach

By leveraging AWS worldwide availability, MVNOs that want to expand to new markets can speed up their system and processes set up for new markets. Furthermore, for the ones that are currently operating in different markets, there is an opportunity to standardize the stacks, consolidating systems and technologies while reducing latency or matching data residency in the regions closer to the end users. MVNOs can also leverage the AWS backbone and connectivity services to reduce costs, be more agile, and get more elasticity when interconnecting with the MNO host and visited network.

Sustainability

Amazon is the world’s largest corporate purchaser of renewable energy and is on a path to powering our operations with 100% renewable energy by 2025. This is five years ahead of our original target of 2030. In 2021, Amazon reached 85% renewable energy across its business. Moreover, Amazon has created The Climate Pledge with the goal to become carbon net-zero by 2040, 10 years before the Paris agreement. In 2022, AWS announced that it will be water positive by 2030, making more water available to the communities where AWS operates. AWS is also working to become more energy efficient, for example with Graviton 3 and by improving cooling efficiency. Graviton 3 uses 60% less energy than non-graviton Amazon Elastic Compute Cloud (Amazon EC2) instances. Studies from 451 Research have shown that AWS is 3.6 times more efficient than median US enterprise data centers and five times more than in Europe. By using AWS, customers can lower their carbon footprint by 80% compared to surveyed enterprise data centers, and 96% once AWS is powered with 100% renewable energy. At the same time, customers can focus on sustainability in the cloud so their decisions can help them optimize their carbon footprint. Customers can select AWS Regions with a more renewable energy supply, scale their workloads based on demand, optimize components that consume most resources (e.g., they can use AWS CodeGuru to find the most expensive line of code), implement data management best practices to reduce the usage of storage, or optimize the test and development environments. By using the same example above, MVNOs can reduce their carbon footprint by switching to Graviton 3 instances or by switching off test environments when not needed. AWS also launched the Customer Carbon Footprint Tool, which customers can use to understand data reports on the emissions of AWS by following Greenhouse Gas (GHG) Protocol standards. MVNOs can also track the changes in their emissions over time as they migrate workloads to AWS, re-architect applications, or deprecate unused resources. At the same time, the Customer Carbon Footprint Tool can forecast how and MVNOs emissions will change across their sustainability journey as Amazon progresses toward powering operations with 100% renewable energy.

Conclusion

This post described how in the same way that MVNOs do not run and own wireless network infrastructure, running on-premises IT infrastructure might not be able to help MVNOs achieve their goals. We believe that AWS allows MVNOs to reduce the time-to-market by having a solid, secure, and reliable infrastructure. It offers managed services and serverless technologies, with a global infrastructure (in the case of expansion) and SaaS solutions from our partners. MVNOs can also be cost effective by moving to a pay-per-value model which removes upfront investment. Scaling based on customers demands and removing undifferentiated tasks, including datacenters provisioning and management. Scalability, global reach, simplified operations, managed services, and SaaS solutions would free resources to invest on innovating fields, like AI/ML or IoT, which can help gain competitive advantages in the market. Moreover, AWS can help MVNOs become more sustainable. This is why multiple MVNOs have chosen AWS. If you want to know more, see the following links:

https://thinkwithwp.com/telecom/
https://thinkwithwp.com/marketplace/solutions/telecom
https://thinkwithwp.com/blogs/industries/category/industries/telecommunications/

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