Good for One? Good for All!: Strategic Value of the Mobile Virtual Network Operator Owned by Host Mobile Network Operator

This We investigated the optimal strategies of host mobile network operators (HMNO) and mobile virtual network operators (MVNO) under (i) asymmetric demand substitution condition between them and under (ii) two different ownership structure of MVNO (independent vs. owned by HMNO). We built a stylized, game-theoretical model and analyze the equilibrium outcomes in three distinct perspectives (each network operator, the network operators in total, and consumer's benefit). We found that when a MVNO is owned by a HMNO, this MVNO enjoys an additional profit resulted from the expense of the HMNO. Also, the network operators in total and consumers take advantages when a MVNO is a subsidiary of HMNO. It suggests that a MVNO owned by a HMNO provides additional benefits not only to the network operators but also to the consumers showing asymmetric behaviors toward the network operators.