MVNOs Are Making A Comeback
You may have already heard of some of these MVNOs. For sure, they are not as recognizable as the Big Four major wireless carriers in the United States -- namely Verizon Wireless, AT&T, T-Mobile, and Sprint -- but in recent quarters, more and more mobile users in America have been availing of wireless services provided by these smaller operators.
Shortened from mobile virtual network operators, the term MVNOs refers to those lesser wireless carriers that lease network capacity from the Big Four and then resell them under their own branding. Obviously, these MVNOs do not offer as wide a portfolio of services compared to the major networks, but they do often deliver a better service package and a more focused approach to customer service.
Make no mistake about it, wireless carriers such as Verizon Wireless and AT&T still rule the industry, enjoying the lion’s share of the overall mobile customer base in the country. But in recent years, many subscribers are beginning to look for less expensive solutions to their wireless needs, and MVNOs have provided the answer. It estimated by research firm Strategy Analytics that there are now 36 million mobile users availing of MVNO wireless services in the US -- that number is about double the number of subscriptions back in 2009. There around 300 MVNOs in America as of now, and according to consulting firm Besen Group, about two thirds of them are profitable.
Some industry watchers are proclaiming that the comeback of MVNOs is another proof that the wireless industry landscape is starting to change. Of course, it all began when major wireless carriers, led by T-Mobile, started getting rid of their standard two year service agreements, effectively making it easier for mobile users to switch networks. Also, the practice of selling unlocked handsets has allowed people to dart from one carrier to another more often. The end result is that consumers now are less shackled by the Big Four, and more open to trying out smaller carriers, like MVNOs. It also helped that leasing network capacity is no longer as costly as before. In the last half decade, lease rates have dropped as much as two thirds and signs indicate they will continue to fall.
Of course, big credit goes to the MVNOs themselves for rising to the occasion by focusing on achieving customer satisfaction rather than offering the biggest, widest range of services. Latest industry rankings from Consumer Reports has three MVNOs at the top of their list, namely Consumer Cellular, Ting, and Republic Wireless. The Big Four? They are right around the bottom rankings.
They may not be as popular as the major wireless carriers, but these MVNOs have proven that in the big blue ocean of the wireless industry, small fishes can swim with the big ones, too.