WiMax breathes new life into MVNOs

The deployment of WiMax infrastructure will breathe new life into mobile virtual network operators' (MVNO) businesses, said a Fujitsu executive.

Makoto Awaga, general manager of the mobile solution business division of Fujitsu's electronics devices group, said in an interview with ZDNet Asia that WiMax will be able to let MVNOs get a leg up on traditional operators by delivering richer content to customers.

An MVNO is a company which provides a mobile phone service but is distinguished from traditional carriers in that MVNOs do not own their own frequency allocation of the radio spectrum nor the infrastructure required. MVNOs lease portions of the spectrum from carriers.

Typically, MVNOs differentiate their service from that provided by carriers by pushing content exclusive to them to mobile users. Since carriers are able to provide broadband connectivity at cheaper rates on the infrastructure they own, many MVNOs build their business models around adding content.

With the entrance of WiMax to the picture, MVNOs have a much larger capacity to provide value, said Awaga.

Awaga said an MVNO could capture the market by gaining exclusive rights to a line of handsets and licensed content.

The Japan-based executive brought up the example of an MVNO, Disney Mobile, set up jointly by Disney and Softbank in Japan. Disney Mobile provides Disney-branded handsets exclusive to Softbank's network, which also deliver Disney-related content installed in the hardware.

"MVNOs are in a better position to capture the market...Now, manufacturers also need to talk to MVNOs," said Awaga.

Awaga added that current service operators therefore need to break their "conservative attitudes" toward content providers if they want to compete.

Virgin shut down its Singapore MVNO in 2002 citing the saturated market and lack of new customers.

In terms of WiMax deployment, Awaga identified the Bric countries--Brazil, Russia, India and China--and Eastern Europe as hot markets.

He added that the next group of emerging markets, the Vista countries--Vietnam, Indonesia, South Africa, Turkey, Argentina--will see WiMax deployment later than the Brics, but are expected to catch up with the latter's WiMax developments within two to three years.

Awaga said Fujitsu will supply Japanese mobile WiMax operator, UQ Communications, with functional base stations by June. The second generation of WiMax modules for consumers are expected next year, coming in smaller form factors such as SD cards which can be plugged into mobile Internet devices, he said.

The third generation of WiMax chips will be found integrated into ultra low-cost chip modules which then make it possible for them to be placed into "almost every product" such as household items, and will happen around 2010, added Awaga.