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MVNOs are smaller companies that sub-lease licensed frequencies from larger cellular networks to cater to niche markets. They offer tailored products, discounted service plans, and self-contained operations with their own pricing, billing, and customer service structure. MVNO coverage maps may be limited compared to their larger partners.
Large cellular networks often contract with smaller companies to sub-lease licensed frequencies for resale of cellular service to a niche market. The smaller company is known as MVNO (Mobile Virtual Network Operator).
There are many benefits an MVNO can provide to a much larger cellular service. The MVNO can tailor its product to cater to a very distinct segment of the market. For example, Boost Mobile is an MVNO using the Sprint PCS network. Boost is aimed at a young, hip, and gadget-savvy audience, while Sprint PCS is meant to cater to a wider audience. While Sprint PCS cannot afford to cater to very specific target markets, it can benefit these markets indirectly by leasing its network to others who can.
A network may also be underutilized in some areas, especially as technology grows to meet the demand for faster data transfer. An MVNO could focus on the area of new growth, helping to populate the network with that segment of the market that likes to run ahead of the pack, thus generating profits that ultimately help fund growth.
An MVNO also offers more choices for the consumer with discounted or alternative service plans. Many pay as you go phone plans are offered by MVNOs. Virgin Mobile, which also uses the Sprint PCS network, caters to those too young to own a credit card and those whose usage is too low to justify a standard plan. Net 10 and Tracfone use the Cingular Wireless network to provide hybrid phone plans. These plans fall between pay as you go plans and monthly pricing plans.
An MVNO maintains its own pricing, billing, and customer service structure. With regards to clients, its operations are self-contained and all contractual arrangements are between the client and the MVNO.
Most local carriers are MVNOs, which offer discounted fares to service areas that fall within certain counties or regional territories. However, an MVNO can also be national, although it may be limited to non-roaming territory. Therefore, the MVNO coverage map can be quite poor compared to that of its larger partner. Ensure the MVNO is serving the required regions by consulting its coverage maps, rather than those of its partner.
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