Over the years, traditional mobile operators have taken the back seat while new and innovative mobile virtual network operators are at the forefront of the mobile industry. Although MVNOs offer lower costs for consumers, there's no compromise on quality or service.
So, how do they work? In this guide, you'll learn about MVNOs, their benefits, and their comparison with traditional mobile network operators.
Mobile Virtual Network Operators (MVNOs) — What Are They?
A mobile virtual network operator (MVNO) is a company that provides mobile phone services. But they don't have their own wireless network. Instead, they partner with major mobile carriers, such as AT&T, Sprint, T-Mobile, and Verizon, to provide you with service.
MVNOs often cater to a specific customer base. Some may focus on international calling plans or unlimited data plans. Others may have no credit check or contract.
Since MVNOs do not own the network infrastructure, the cost of providing service is lower than that of the traditional carriers. The low cost is passed on to the consumers in the form of cheaper mobile plans.
How They Work
An MVNO piggybacks on an MNO's network. In return for access to the MNO's infrastructure, the MVNO pays fees to the MNO, which are generally a percentage of the MVNO's revenue.
The relationship allows the MVNO to operate its own mobile service, often at a lower cost than would be possible as an MNO, while the MNO focuses on running its network. MVNOs typically target niche markets, such as prepaid customers or those who want a low-cost alternative to the MNOs' flagship brands. For example, Metro is an MVNO that piggybacks on T-Mobile's network, and Boost Mobile used Sprint's network before its acquisition by DISH.
MVNOs can also offer specialized mobile services that the MNOs do not provide, such as international calling or voicemail-to-text transcription.
Typically, MVNOs follow one of the four operational models. These include:
- Reseller MVNO: In this model, the MVNO does not own any network infrastructure but leases capacity from the MNO and resells it to customers. The reseller MVNO operates under its name, which differs from the MNO.
- Service Provider MVNO (Thin MVNO): A service provider MVNO also operates under its personal brand name. But it might use a new distribution channel or concept to attract a large customer base and differentiate itself from the competition.
- Enhanced Service Provider MVNO: Such MVNOs have their own SIM cards and operate under their names. What makes these MVNOs different from others is the additional value they bring to the table. They may add specific services to upsell themselves, such as an unlimited music or video streaming plan.
- Full MVNO: A full MVNO owns and operates its switching equipment to provide a comprehensive mobile service. That includes billing, voicemail, and customer support. These MVNOs have more control over customer services but require a significant investment.
The mobile virtual network operators market is filled with different MVNOs offering a broad range of mobile services. Here are some of the most popular MVNOs in the United States and Canada:
- AT&T
- Verizon
- Sprint
- Rogers
- Telus
- Bell
- Metro by T-Mobile
- Mint Mobile
The Benefits of an MVNO
Whether they provide the same services as their parent network or offer additional perks, MVNOs are quickly gaining popularity for many reasons. Here are just a few benefits MVNOs offer:
Lower Prices
Consumers are drawn to MVNOs for their low prices. By working with extensive existing networks, MVNOs can keep their costs down and offer cheaper plans and services to their customers.
Tailor-Made Options
MVNOs can offer tailor-made options for businesses and consumers. For example, Boost Mobile has several prepaid plans designed for people who want to avoid long-term contracts.
Some MVNOs specialize in plans with high data limits or international calling options in the business world. That allows businesses to get exactly what they need without paying for features they'll never use.
Greater Customer Care
MVNOs are typically known for their excellent customer service. Since they're smaller, they can focus on providing a more personal touch than the Big Four carrier networks (Verizon, T-Mobile, AT&T, and Sprint).
Mobile Virtual Network Operators vs. (non-virtual) Mobile Network Operators
Mobile operators traditionally own and operate their own networks. It includes the radio access network (RAN) and the core network infrastructure.
However, things have started to change with the advent of mobile virtual network operators (MVNOs). Here are some ways MVNOs differ from traditional mobile operators.
Network Ownership
MVNOs do not own their networks, and they do not have any infrastructure of their own. Instead, they lease network capacity from traditional mobile operators.
Smaller Customer Base
MVNOs generally have a smaller customer base as compared to mobile operators. It allows them to provide better prepaid plans to customers.
Niche Customer Segments
MVNOs typically target niche customer segments. They focus on providing services to a specific group of people, such as budget-conscious businesses, start-ups, etc.
No Exclusivity
MVNOs are not tied to any one mobile operator. They can choose to switch providers anytime, giving them more flexibility.
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