As the number of iPhones, and Apple’s influence in mobile market continues to grow, Cupertino company keeps thinking about how to get rid of the chokehold mobile operators have on the market.
Since getting enough spectrum to build your own mobile network is almost impossible, the next best thing for Apple will be to establish it’s own Mobile Virtual Network Operator (MVNO).
And, as this new patent application shows, Apple is still seriously thinking about it’s own MVNO.
MVNO’s usually lease the wholesale mobile network capacity from one operator (e.g. Sprint, Verizon, T-Mobile or AT&T) and then resell that capacity to it’s own customers as it’s own mobile service. To the end customer MVNO looks like a normal mobile operator, and the user has no direct connection to the carrier who’s network he is using.
Apple takes the MVNO model one step further, and wants to have contracts/relations with all the carriers. The basic idea is to create it’s own full service MVNO, with it’s own Home Location Register (a central database were all network’s customer SIM card details are stored), that will be registered and available on all carriers. The iPhone users will become clients of Apple’s MVNO and deal directly with Apple. Network operators will then be allowed/required to submit the bids for their services to Apple, which will pass the offers to the customer iPhone. Furthermore, the whole process can be done dynamically, individually for each iPhone, based on it’s location, time of day and other factors.
For example, let’s say AT&T has just upgraded it’s network in your town and has a lot of spare capacity. At the same time, T-Mobile’s network there is bursting at the seems and can barely accommodate it’s current users. Since idle network only loses money, AT&T can send a serious rate discount offer to Apple , and all iPhone users in your town now have an option to switch to AT&T at a much better rates. You get cheaper calls and data, AT&T gets to use the idle capacity and gets paid for it. Everyone, except T-Mobile, is happy.
Now imagine this happening all over the world, with carrier bids streaming in, sorted and accepted in real time, for the use of each network base station. Very soon a very efficient market will develop, and you will be able to get the best mobile service at a best possible price…
Which is great thing for you, but a nightmare for your mobile operator. That’s because network operators thrive on market inefficiencies that they can exploit, because they were granted a monopoly rights over the radio spectrum.The last thing mobile operators need is an efficient market, where they have to compete for a customer offering best service at the lowest possible price.
This is why, unless there are some regulatory changes, I think Apple’s own MVNO will remain just a dream for a long time.
It’s not like Apple just got an idea for this MVNO today. The patent application described above is just an extension of the one filed way back in 2006. This year Apple was granted a patent for the multi-carrier MVNO. It’s now 2011 and Apple is no closer to launching it’s own MVNO then it was 5 years ago, in 2006.
But here’s to keeping such a nice dream alive
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