Cellular MVNOs (Mobile Virtual Network Operators) are gaining attention and subscribers in the U.S. due in-part to cheaper pricing models built around BYOD and Wi-Fi offload:
many new MVNOs are adopting Bring Your Own Device (BYOD) strategies, with SIM-only MVNOs like Simple Mobile, Red Pocket and Ultra on the GSM side, and a new BYO Sprint Device solution for MVNOs like Kajeet, Ting and others on the CDMA network. Sprint’s BYOSD program has the added benefit that no SIM kit or installation is required; the handset is activated simply via its serial number.For those unacquainted with MVNOs, they purchase wholesale access to the larger carrier networks and repackage services with different pricing plans to subscribers.
With BYOSD, for example, Kajeet offers network-based parental controls, web filtering and location services on recycled handsets. BYOD solves two problems for the MVNO – eliminating handset subsidies and reducing logistics cost (kitting, shipping, warranty repairs and returns). Even where customized handsets are used, MVNOs sell them above cost, eliminating costly subsidies.
Service – airtime and data – costs can also be reduced. With increasing data usage, many MVNOs utilize dual-mode phones (cellular and Wi-Fi) to offload voice and data traffic to Wi-Fi networks, which is increasingly available in homes, offices and businesses. And an added benefit for providers: offloading to Wi-Fi turns off the carrier’s meter.
When Republic Wireless introduced its $19/month unlimited plan as a beta trial, everyone asked how they planned to do it. Republic relies heavily on Wi-Fi networks at home and work, using “hybrid calling” or cellular offload where traffic only rolls to Sprint’s cellular network when Wi-Fi is unavailable. Republic is now shipping a Motorola Android smartphone, running proprietary Republic software (for $259), which completes the no-contract package. And apparently the beta trial worked just fine: the same $19 plan is now available to all.
FreedomPop guarantees 500MB of free 4G mobile broadband data every month, with no data caps or throttling, and attractive plans ($17.99/month for 2GB of data, a cent per MB additional). Customers can earn additional data for each friend referred or unlimited data by engaging in partner promotions. The Freedom Hub Burst, a 4G Wi-Fi router that offloads cellular to wireline and supports up to 10 devices, is free with security deposit. They also offer the Freedom Sleeve Rocket, an iPod Touch case that turns it into an iPhone. Plans include trading bandwidth with other FreedomPop users, and creating bandwidth-sharing communities. Launched on Clearwire, FreedomPop will add Sprint’s LTE network next year.
What I find interesting is the unique business approaches being offered by MVNOs through a combination of cellular data coupled with prioritized Wi-Fi offload when Wi-Fi is available. BYOD is also a new approach in the cellular world, where historically strict control over subscriber client device options helped ensure network performance.
MVNOs are also leading solutions to ease international cellular data roaming.
If you travel overseas and want to maintain your mobile data connection, you’re either going to pay criminal roaming rates or endure tremendous hassles avoiding them. But a new breed of virtual operators like Voiamo are looking to create the first truly international plans.
To put it simply, international data roaming is broken, and no U.S. carrier seems to be lifting a finger to fix it. They seem to prefer the miserable status quo to the headaches required to repair the system. But where the network operators are falling down, mobile virtual network operators (MVNOs) are picking up the slack.
While most MVNOs tend to work in a single country with a single carrier, there’s nothing preventing them from buying capacity on multiple networks in multiple countries and then selling international access to a customer in a single pricing plan.
London-based Voiamo, however, is thinking bigger with a new service called GlobalGig. Instead of just renting you a hotspot and selling you a temporary plan when you travel, it proposes to replace your current country-limited 3G or 4G modem plan with a service that will work in multiple countries with a single pricing plan. Its rates are a comparable to the prices most of the major carriers charge for hotspot plans — starting at $25 for 1 GB a month and up to $50 for 5 GB — but those rates are good for the U.S., the U.K. and Australia.
In the U.S., GlobalGig uses Sprint’s network, while in the U.K. and Australia it uses the 3 and Optus networks, but it is negotiating deals with carriers in other countries and plans to expand its global footprint soon, Voiamo CEO and founder Nigel Bramwell said. Its $120 hotspot — which can connect up to five devices through Wi-Fi — can support networks in 100 different countries, Bramwell said. As GlobalGig adds more carriers to its roster it will periodically send out new SIM cards to its customers, expanding their coverage to new countries.
MVNOs are typically thought of as services that cater to the more price-conscious consumers; those that can't afford more expensive contracts by the larger carriers that lock subscribers into 2-year commitments.
But perhaps it's time to re-assess their offerings and take a serious look at MVNOs for better service offerings than their larger competitors.