Thursday, October 10, 2013

MVNOs—a new threat to cell phone providers?

Ever seen MVNO and not been sure of what it means? MVNO stands for Mobile Virtual Network Operator. These are companies that provide mobile phone services but has to rely on other networks in order to operate. It does not own the infrastructure that allows the phones to operate, it merely sells the phone and plans and uses a company that owns the network to run them.

How This Works

An example of an MVNO is a prepaid cell phone provider. The business selling the prepaid phones and plans enters an agreement with the mobile network operator (big names such as AT&T and Verizon) to access bulk wireless services at reduced rates, in order to increase prices to sell to customers. The MVNO is able to piggyback the mobile service network without having to invest in its own infrastructure.

Popular MVNOs

1. Virgin- one of the earliest and most successful MVNOs, Virgin Mobile has a very wide range of phone and plan options; a lot of phones found at Virgin can only be purchased through a contract service provider, a good example of this being the iPhone. Plans range from $35-$55, and have varying features with each.

2. Straight Talk- offered through Walmart, this prepaid cellular phone company is a very popular choice for those who do not wish to enter into a contract with mobile phone providers. Straight Talk operates on Verizon’s network, and offers a wide variety of phone plans, from a basic $30 a month plan that includes talk time, texts, and data, to the $495 a year plan, which includes unlimited talk, text, and data for a full year.

3. iWireless- this MVNO is offered through Kroger, and operates on the Sprint network. They offer a wide selection of phones, from basic phones to 4G smart phones, along with a few different plan options. Plans start at $10 a month for basic texting and talk times, and go up to $75 a month for unlimited features.

4. Boost Mobile- not specifically offered out of a retailer, Boost Mobile is an independent MVNO that is very successful. It too runs on the Sprint network, and has a wide selection of phones and plans. A great feature of these plans is the price shrinking, where on time payments mean a lower bill.

Benefits of MVNOs

So why choose an MVNO? What makes it better than a service provider? MVNO mobile providers are a great option for those who do not want to be stuck in a contract. Contract phones are costly, and run on the same networks as a lot of MVNOs. For budget conscious people, one of these mobile carriers is the better choice. Many even have their own staff of support and help centers, so you don’t have to deal with the contract carrier’s help centers.

The biggest draw is cost—compare an average phone bill of $45 on an MVNO plan, to that of upwards of $100 with a contract plan. MVNOs are revolutionizing the way the mobile phone industry is operating, making cellular service even more readily available. Mr Issa Asad.