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August 4, 2015

Will Apple battle Google in the MVNO market?

Device vendors could shake up telecoms with multi-carrier plans.

By Alexander Sword

Apple is reportedly in discussions over launching a mobile virtual network operator (MVNO) in the US and Europe.

The company is privately trialling the service in the US, but is speaking to European telecoms companies about launching there.

According to the report in Business Insider, consumers would be able to pay Apple directly for data, calls and texts.

The service is said to be at least five years away, although talks have been ongoing for years. Apple first filed a patent for an MVNO back in 2006.

"Systems, methods, computer software for providing access to wireless communication services are provided," reads the application.

"The invention, in one embodiment, can involve storing a network address on a mobile device and sending a request for network operator data from the mobile device to a mobile virtual network operator server associated with the network address."

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The key innovation lies in the ability to move between different operators. Devices would be loaded with an Apple SIM that would switch between carriers to get optimal service, as the application states:

"In response, network operator data is received, and, based on the received network operator data, a network operator is selected. Communications are thereafter conducted using the selected network operator."

If the reports are correct, Apple would not be the first mobile device vendor to move into the MVNO space. Google is working with T-Mobile and Sprint in the US on its Project Fi MVNO.

Similar to Apple’s patent, Project Fi switches between networks to gain the best signal, including wi-fi networks. It also refunds unused data in the form of credit.

John Delaney of IDC cautions that the rumours are "all speculation".

"The only thing we know about is the SIM provisioned for multiple carriers, which are used in two devices, both iPads.

"It’s not an e-SIM, it’s a hard SIM. The difference is it is provisioned with multiple operators; you get to choose one of your national operators.

"This is not for phones, this is for data connectivity only.

"Telcos are not concerned about this; right now they don’t sell many tablets. That might change in time if Apple were to start selling voice plans as an MVNO.

"There were reports about two years ago; what’s changed is that Google has launched an MVNO."

Kester Mann at CCS Insight adds:

"Such a move would enable Apple to more closely manage the relationship with customers. Apple likes to control as many aspects of its business as possible – its retail footprint is an obvious example – so such a move would be consistent with that approach.

"However, operators will be wary about relinquishing control and may be reluctant to establish relationships. More likely, Apple would work initially with a smaller player whose network may be less advanced than a larger player, which would have more to lose through any agreement."

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