MVNO – Mobile Virtual Network Operator

A traditional MVNO, or mobile virtual network operator, is a company that provides mobile service — 4G, for example — but doesn’t own the actual infrastructure. Instead, the MVNO leases capacity from an actual carrier, an AT&T or Verizon, then sells this service directly to customers.

Apple has been keenly interested in being an MVNO since before iPhone — back when the failed Motorola Rokr was the only ‘iTunes Phone’ on the market. That original Apple patent, which the company asked to extend in 2011, was created by Tony Fadell, the former Senior VP at Apple who went on to create Nest, the home automation hardware company now owned by Google. As the original Fadell patent makes clear, Apple’s proposed MVNO wouldn’t simply lease capacity from a single network, but pit carriers against one another.

Bids are received from multiple network operators for rates at which communication services using each network operator can be obtained. Preferences among the network operators are identified using the received bids, and the preferences are used to select the network operator for the mobile device to use in conducting communications.

There’s still another clue that Apple is interested in the MVNO opportunity, despite the denial. Just last month, the Financial Times reported that bothApple and Samsung were in “advanced talks” with GSMA, a global telecom industry consortium, on an embedded SIM (eSim) card that would let mobile phone users switch from one carrier to another on the fly. Right now, the traditional SIM card locks the user’s phone to a particular network, so the potential for the eSim, planned to launch in 2016, is huge. Maybe Sprint has excess capacity in Los Angeles and you choose Sprint. Then you travel to Silicon Valley, where T-Mobile offers the best price. In theory, Apple could have software to automate all this for you, choosing the best option based on price, time and place. For those who travel from country to country, this could be a godsend.

With an MVNO, Apple controls the all the important pieces, the smartphone, the customer relationship, and has reduced carriers to little more than dumb pipes.


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