We explain mobile virtual network operators (or MVNOs) and how they work.
What Is a Mobile Virtual Network Operator, or MVNO?
There are a bunch of options for wireless service from companies offering different kinds of plans, different perks.
Some companies operate their own networks. Others lease access to a network and resell that service to consumers. Carriers who don't own their own network are called mobile virtual network operators, or MVNOs.
When you're shopping for the best deals and the best coverage, getting a lay of the land can really help you out.
So just what is an MVNO? Let's find out.
MVNOs and the Big Three carriers
In the United States, there are three main networks generally available in most regions. These are MNOs, and they include AT&T, Verizon, and the newly merged T-Mobile and Sprint. These are the big dogs, the most visible companies in mobile. Here at Reviews.org, we often call them the Big Three.
But defined above, we know there are a bunch of other companies that offer cell service called MVNOs. MVNOs offer consumer-facing services like billing and tech support. They sell phones and offer financing. They just don't own or maintain the network. Instead, they lease time on the MNO networks and sell that to their customers.
How do MVNOs work?
Now that we've spelled out the basics of how MVNOs and MNOs work, one might think it would be more costly to do business with an MVNO. They're just middlemen, right?
Well, currently this relationship between MNOs and MVNOs afford the smaller carriers the flexibility to offer some competing perks. It's not just as simple as service at a lower price. It's very likely that there will be different caps on your monthly data. Or your connection might not be prioritized during periods of heavy congestion.
Popular unlimited data plans from MVNOs
In most markets though, with decent infrastructure, that peak of the bell curve, average data use should be really well supported. The MNOs (i.e., the Big Three) want to monetize as much traffic as they can. So it makes a lot of sense how MVNOs can often offer lower prices.
As a terrible oversimplification, let's say you had a wireless network that could sustain 100 users, but only 30 were signed onto your service. You have extra unused capacity. You sell that extra room to another company at a bulk rate with the understanding that your primary customers are a higher priority and everyone's happy.
As you can see, the network owner is making more money on their infrastructure, and consumers are able to shop different plans with different perks. And it's obviously more complicated than that, but that's a part of how all this works.
What are some benefits of MVNOs?
Some carriers might include perks like partnerships with media distribution, such as free streaming services and the like. But we've asked our readers and viewers, and they tell us that while those add-ons are fun, they often aren't the features that convince the folks in our comments to stay with the carrier, change their plan, or switch carriers.
Responding to consumer interests, the MVNO game has gotten more aggressive on price and flexibility, no-contract plans, prepaid plans, bring your own phone (BYOD) instead of leasing a phone, and lower prices for metered data instead of unlimited plans. And even some of those unlimited plans are getting really wallet friendly.
As a personal tangent over the last year, I haven't been traveling, so I switched to a metered plan on my MVNO. That saved us a lot of money since we were mostly using Wi-Fi rather than mobile data. Now that I'm through both of my shots, though, I'm looking to venture out a little more, so we might need to revise that data plan. This is possible because of the contractual freedom offered by MVNOs.
You can take advantage of that too. Let's say you eventually want to sign on a family plan with a Big Three carrier. You can test drive their networks really inexpensively and without signing your life away if you know which network an MVNO leases time on (again, check out those articles I listed above to see which carriers are on which network).
I'm on a prepaid plan that mostly piggybacks on T-Mobile's network. Now I've got a really good idea of how T-Mobile delivers service in my neighborhood, if I ever choose to sign directly with them.
Better still because an MVNO is a front-end service, many of these carriers will lease time on multiple networks. You can often bring a phone from any other carrier, and it will probably be supported. And if you move to a different area where one MNO has stronger service, you might be able to swap out your phone for a model that better supports that other network without changing who you do business with.