Mobile Virtual Network Operators in the United States, EU and Hong Kong

Mobile Virtual Network Operators in the United States, EU and Hong Kong

Introduction

A Mobile Virtual Network Operator (MVNO) is a provider of wireless communication services which does not own radio spectrum over which service is provided to the customers (Anttalainen, 1999). It brings telecom and non telecom companies the opportunity to participate in the mobile sector. Recently, it is surfacing in the form of interchanging channels for network operators to cater to increasing traffic and also give a boost to their market share. The concept of MVNO has become popular in almost all continents. However, Europe and U.S. are home to markets where more MVNO ventures have developed than anywhere in the world. In order to better understand the rise of the MVNO concept, discussion of top mobile visual network operators of US and Europe is required.

Discussion

SK Telecom

SK telecom is the biggest mobile operator of Korea with over 24 million subscribers. The company holds a renowned name in mobile operating industry and takes pride in being the first company to commercialize and launch CDMA, 3G CDMA and 3.5G HSDPA. Moreover, currently it is leading the industry towards 4G and beyond. In addition, the company also provides internet services through WiBro Service.

Business Model and Description

SK Telecom believes in working in diversified industries including Education, Construction, Automobile, Health Care, Small & Medium Enterprises and Retail etcetera. Working in fields so different helps the company in reducing its operational risk and increasing the chances of successful business executions.

Figure 1: SK Telecom Business Model

Source: http://www.sktelecom.com/eng/html/n_sktintro/BusinessAreaB2B.html

The company mainly operates in three segments namely fixed-line telecommunication services, cellular services and other businesses shown above.

Marketing Strategy

Because of its leading market position in South Korea, the company introduces its products in the US using its brand image. Moreover, SK's broad service portfolio proves to be most substantial for its business, due to the reason of minimum risk and maximum profits; investing in diversified business areas reduces risks of failures extensively. This is the only reason that the company enjoys higher margins compared to all its competitors.

Financial Data

Immense revenue of approximately $14,389.5 million had been recorded by the company's operations in 2011. This revenue represented a 2.5% increase over the fiscal year 2010. During 2011, approximately $1,918.3 million was accounted as the operating profit, with a 6.8% decrease to the 2010 records. Approximately $1,451.6 million was recorded as the net profit of the company in 2011, which is 12.4% less compared to 2010.

Moreover, SK Telecom debt has increased by around 21% because of huge investments in Hynix Semiconductor in February 2012. Around $2,250 million were taken on loan from the Woori Bank and Kookmin Bank to fund the transaction (Marketline, 2012).

Agreement with Earthlink

In 2005, SK Telecom joined with US Company Earthlink to form their new US Mobile Carrier namely SK Earthlink. However, in the end of 2005, the company's name was changed to Helio. Working in coordination with Earthlink, SK Telecom introduced its new series of advanced mobile ...