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MVNOs vs Telecom Carriers: Symbiosis or Parasitism

MVNOs vs Telecom Carriers: Symbiosis or Parasitism

MVNOs or the Mobile Virtual Network Operators seem to showcase a revival in the recent US market and according to two decent sized operators GSM Nation and Ting,   it is mostly because of the permission from the big carriers. The post below is a discussion on the rising of MVNOs is the present American sector.

Price and Flexibility

The MVNOs are coming up greatly as the reseller of data and voice services of the big operators. But, albeit being a reseller of the major carriers, the MVNOs are usually providing much lower rates as well as better flexible plans with their services (more info here, here, and here). In the past few weeks, the US market has witnessed a rising emergence of several MVNOs like Karma, the data-only operator and Voyager Mobile. Karma touts a distinct social model on sharing the bandwidth with masses while Voyager Mobile has launched 2 simple yet comprehensive plans- a plan with data & another one without data.

GSM Nation was helpful

A huge number of MVNOs have created their business plans around plentiful & cheap data and it’s chiefly because the operators have got more flexible regarding their charge on mobile broadband. Earlier, the carriers were not eager to allow the MVNOs easy access onto their own data networks and even when they started giving out the permission, the carriers used to charge prohibitive rates and their virtual acquaintances had to submit upfront payment for megabytes. As per Ahmad Khattak, CEO of GSM Nation, this very policy made it tougher for the MVNOs to come up with affordable data plans.

However, the scenario changed 9 months back when T-Mobile and AT&T started off selling data and voice airtime in plentiful that provided the MVNOs with the needed flexibility benefit in the pricing, as per Khattak. In fact, more significantly, the leading carriers joined hands directly with MVNOs to work out unique schemes against a percentage portion of the revenues generated from those plans. The MVNO would submit its proposed bulk of minutes & data to its partner carrier & a fee of $15,000- if it’s accepted, the carrier would take up 25-30% off revenue every month.

According to Khattak’s statement, these new policies made it very cheap and easy to launch up an MVNO and as per the estimates, GSM Nation could sail off with just $700,000 investment support, supplemented by the revenues sent from its retail business on smartphone. However, GSM was primarily in a dilemma whether to opt for T-Mobile or AT&T but they took to the former given that T-Mobile is more receptive towards the new MVNOs in comparison to AT&T and provided GSM with better bandwidth while another option seemed to be greatly protective of network. Besides, AT&T won’t permit MVNOs on selling any handsets and that could have debarred GSM from connecting Galaxy and Apple devices the company retails online.

Sprint is friendly to MVNOs

Sprint has long been a supporter of MVNOs and lately it has extended its network further towards wholesale partners, as per the reports from Noss, CEO & President of Tucows, leading web hosting firm which launched Ting, its very own MVNO. Sprint’s flexible policies and wholesale rates enable Ting to present potentially disruptive and great innovative plans. Customers here can sign-up for minutes or tiers, data & SMS. In case, you are using less that what has been allotted by your plan for the month, Ting would credit the customer for unused minutes, data or text in the next month. Sprint’s generosity towards MVNOs has achieved it several partners like Voyager, Republic Wireless, Kajeet, Movida & many more.

Carriers and MVNOs vs. Carriers or MVNOs

Khattak feels that big carriers have realized that they might lose customers which have encouraged them to join hands with new MVNOs that in turn enables them to relish wholesale revenues. But, according to Noss, the carriers are mostly dragged to MVNOs.

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About Mukesh Agarwal

Mukesh Agarwal is a VoIP enthusiast and a passionate blogger. He speaks at VoIP conferences worldwide advocating the advancement of VoIP technology to convert this world into a global village.

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