UPDATED 22:58 EDT / AUGUST 03 2015

NEWS

Report: Apple looking to launch MVNO service in U.S., Europe

Apple may be about to enter the telco business with a report Monday that the computing and device giant is considering launching a mobile virtual network operator (MVNO) service.

According to Business Insider, Apple is already privately testing an MVNO service in the United States, and is said to be in talks with European telcos about launching one there as well, although it’s not clear from reports whether they were targeting particular countries or looking at a broader European offering; Europe doesn’t have a unified mobile network, but there are telcos, such as Vodafone Group plc and Hutchison Whampoa Limited through its “Three” network that do have a presence across multiple Europe territories.

The same report notes though that there is no guarantee an Apple MVNO service will launch beyond a test phase and even if it eventually does, it may not roll out anytime soon.

“Telecoms sources say Apple is looking long-term with its MVNO and could take at least five years to fully launch the service,” the report notes, before adding that “Apple has been in talks with telecoms companies for years over its MVNO plans, those sources say, adding that it’s an “open secret” among carriers that a virtual Apple network is on the way.”

If Apple was to launch an MVNO it would follow the lead of Google, Inc. who entered the telco space with the rather unexciting “Project Fi” back in April this year.

Control freak confirmation

There could be several reasons Apple may be looking at becoming an MVNO, but they all come back to one common theme: control.

Apple famously upset the telecommunications business in June 2007 when it launched the first iPhone: prior to that launch it was telcos who dictated what phones were released and how they were sold, and even what apps and other junk appeared on the phones; Apple literally threw that model out the door and even went as far as building in AT&T signup confirmation into iTunes.

Fast forward to 2015 and Apple, along interestingly with its arch rival in the smartphone space, Samsung Electronics Co. Ltd., are proposing to do away with removable SIM cards, with the general idea being is that you could change mobile carrier by using an app on your phone.

Presumably in Apple’s case the app to sign up to or switch carriers will be an Apple one, with a good chance it will be built into iTunes, but what if one of those options for carrier was Apple itself, with billing for the service being as simple as purchasing music or renting a movie?

That’s likely Apple’s thinking with the MVNO process, they get control of yet another aspect of the iPhone users’ experience, and naturally there would be money in it for them as well.

The only question though is how an Apple MVNO will play with competing telcos; yes, MVNO’s by their very nature are virtual networks running on top of actual, existing networks, but Apple’s market position, combined with the fact in a market without removable SIM cards, it would be both the gatekeeper as to which companies could provide cell services to iPhone users, as well as a provider in itself, potentially opens a Pandoras box of competition and anti-trust law problems.

Apple is said to have had no comment on the report.

Image credit: deerkoski/Flickr/CC by 2.0

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