A Model for the Interconnection and the Competition among Hosting and Virtual Network Operators

L. Cricelli, M. Grimaldi, and N. Levialdi


Modelling, numerical simulations, mobile telecommunications, and competition


In the mobile telecommunication sector, the growing competitiveness has increased the complexity of the business interactions among Mobile Network Operators (MNOs). The situation has become even more difficult at the increase of the number of players and, above all, at the entry of a new kind of operators, the Mobile Virtual Network Operators (MVNOs). This paper analyzes the relationship among Hosting Network Operators (HNOs), MNOs, and MVNOs in the mobile telecommunications industry. A model has been defined to analyze the strategic consequences of the different typologies of interconnection among operators. With reference to the Italian mobile industry, different scenarios have been envisaged to observe effects when a MVNO compete with differently sized operators and when it is interconnected with the incumbent or with the follower operator. The analysis of the results obtained by the model has been focused on retail price strategies, on market shares erosion, and on profit allotment.

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