The mobile virtual network operator (MVNO) business is booming, with new MVNOs launching nearly every week. But unlike the MVNO craze of 2005 (highlighted by big-name failures like ESPN Mobile, Disney Mobile, Amp'd Mobile, Helio, and more) analysts believe that today's MVNOs have a better chance of success thanks to a number of factors. Most MVNO's offer cheap monthly fees, no contracts, and prepaid devices, making them ideal for consumers who want a smartphone for less.
Carriers are currently making offerings more competitive and have opened up the networks to MVNO’s. In the past, an MVNO had to drive a certain level of volume to make it worthwhile. It was risky, expensive, and a very big undertaking. But now, operators are hungry for MVNO partners because MVNOs can help them grow their market share and subscriber base. MVNO’s serve as an inexpensive distribution channel to bring users to their network, and help carriers reach markets where they might not otherwise have visibility.
Carriers often use MVNOs to reach segments of the market that are not as profitable to them or that may dilute their core brand, but operators have to be careful and make sure that the MVNO is profitable and won't be a drain on the network. Many customers do not need the latest and greatest speeds or smartphones; they just need something that they can use to talk, text and use data for an affordable price. And in reality, MVNOs get the same service as carrier customer (except for prioritization and roaming). Therefore, MVNO's are a great option for mobile consumers that want a cheaper option that siding with a contract through a big-name carrier.
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