I was asked today by a contact to come up with a short list of “issues to consider” when looking at a contract for wholesale access to a mobile operator’s network by an MVNO (mobile virtual network operator).
DLA Piper has a great deal of experience in MVNO contracts – having worked very recently on MVNO operations in the UK, Poland, Switzerland, Austria, Saudi Arabia and the USA and I am the author of a template MVNO agreement published by the PracticalLawCompany (subscription needed) – a well known legal information provider. You can also find some slides based on a conference presentation I gave on “setting up a new MVNO” here
I thought it a suitable topic for this blog so here are my “top 6”:
- Is there a minimum revenue or volume commitment? Many MNOs will ask for this but it may be very risky for the MVNO to agree. Volume commitments would be slightly less risky since they would allow for dropping prices.
- Is there a mechanism to benchmark and adjust wholesale prices during the contract? What may look like a good price on day 1 may be an awful price after 18 months – this will be especially important if there is a revenue/volume commitment.
- What provisions are there for the MNO to assist with transfer to a replacement network at the end of the contract? If the MVNO is unable in practice to switch provider then no matter how successful the business it will be very much weaker when it comes to renegotiation.
- Who will own/control the number range? Ideally the MVNO will do this – or if not then the MNO should be obliged to assist with porting the range at the end of the contract
- Non-discrimination – the MNO should not be allowed to prefer its own customers over the MVNOs when it comes to network quality (eg a specific base station location may be especially important for the MVNO’s customers if they are geographically concentrated)
- No-poaching – the MNO should not be allowed to use confidential information about the MVNO and its customers which it obtains from providing wholesale services to poach the MVNO’s retail customers.
I would welcome any more thoughts!