The implementation of new applications related to the Internet of Things that require mobile communications make the figure of the Mobile Virtual Operator (“MVO”) a possible alternative for the development of such new businesses. In addition, recently, the Argentine Communications Entity (“ENACOM” after its Spanish acronym) has granted in favor of certain operators MVO licenses so that the issue is particularly relevant.
A MVO is defined as a licensed mobile telecommunications service provider which does not have an authorization to use frequencies of the radio spectrum and, therefore, lacks its own mobile network coverage. As a result, it must use another company’s (or companies’) network coverage (a Mobile Network Operator, or “MNO”) to render its services through their facilities, signing agreements for these purposes.
With the transformation of mobile devices into a mass use multiservice means of communication, MVOs began to appear globally to operate in specific market spaces with differentiated offers.
In Argentina, after some legislative precedents, MVOs were finally regulated by Resolution No. 38/2016 issued by the Communications Ministry (the “MVO Regulation”).
MVOs’ Regulation introduces a conceptual distinction, defining the (i) MVO with Infrastructure as the one that has a network infrastructure, which allows it to comply with some or all of the functionalities of the service and only requires the use of the wireless network to have access to the MNO’s user; and as (ii) Basic MVO the ones that do not have their own network infrastructure, but they can count on facilities for customer service, billing and marketing.
Furthermore, the MVO’s Regulation sets forth that, in order to provide mobile communications services as an MVO, providers must have a Single Digital License and the corresponding registration as a MVO. Said license and registration must be granted by the ENACOM.
It is also mandatory that the interconnection between an OMR and an MVO is instrumented through service agreements with prices freely established based on a referential MNO offers, annually published. Within the guidelines set forth by the MVO Regulation, the obligation to inform and review the service agreement is mentioned and a proceeding for the intervention of the ENACOM in the event of any differences arising between an MNO and an MVO is established.
Additionally, said regulation also prohibits exclusivity clauses and sets forth the general conditions and minimum content for the services agreements (e.g. commercialization area, description of the services within the scope of the agreement, monetary compensations, period of validity, etc.). Among other limitations, MNOs are not allowed to oblige MVOs to contract more services or elements than the ones necessary to provide MVO’s services.
At the moment, there are four MNOs in Argentina (Claro, Movistar, Nextel and Personal), as well as -according to ENACOM’s website- several companies with licenses and registrations as MVOs that already exist.
This insight is a brief comment on legal news in Argentina; it does not purport to be an exhaustive analysis or to provide legal advice.