How the role of the MVNO has evolved

By Jon Mikow - Vice President, Wireless Sep 14, 2020 3:38:00 PM

 

mvno

MVNO market is predicted to reach 113.9 billion in the U.S. by 2025

Mobile Virtual Network Operators, or MVNOs, have been around since the early 1990s. The traditional role of an MVNO allows competitive service providers to piggyback on wireless carriers’ networks at wholesale rates and offer wireless service at lower prices, usually by structuring price plans in a more cost-effective manner. MVNOs buy excess wireless network capacity from larger carriers such as AT&T, T-Mobile, and Verizon, instead of letting the excess go to waste.

MVNOs Continue to Grow

MVNOs have continued to grow since the 1990s, and the MVNO market is predicted to reach 113.9 billion in the U.S. by 2025—approaching double the 2017 rate of 62.5 billion. MVNOs fill a niche position in the market, but this hasn’t slowed them down. In fact, the reasons that customers select MVNOs are becoming more and more popular.

  • Low Prices: Most customers cite low prices as the highest factor in picking an MVNO for their wireless subscription.
  • Customer Service: Customer service is also noted as one of the top factors. After being slighted in their previous experiences with larger providers, many customers are looking for a smaller business that will make customer service a priority.
  • Charitable Causes: Many MVNOs have tied their service to a cause. For example, Armed Forces Wireless provides a list of organizations that can receive a portion of the proceeds from customers’ phone plans. Customers pay the phone plan, and Armed Forces Wireless donates a percentage of the bill directly to the organization each month. Organizations include Fourblock, which helps veterans prepare for post-military careers, and Landesa, which helps support land rights in rural areas across the world, among others.

Internet of Things (loT) Connectivity

Contributing to MVNO growth, the Internet of Things (IoT) market has grown exponentially over the past few years. Before the introduction of IoT, there was a strong need to automate the management of connected devices and sensors, and the development of IoT has only heightened the number of connected devices. In fact, it is estimated that by 2025, the number of IoT capable devices will cross the 40 billion mark. MVNO providers, with their emphasis on customer service, are helping develop customized plans for consumers using IoT devices and those establishing smart homes.

Now, with 5G rising on the horizon, IoT and MVNOs both look to continue their growth. Because 5G can enable wireless connections at faster speeds, it elevates both IoT and MVNOs towards innovative connectivity solutions, providing fast connections, even as the number of connected devices increases. 5G will create the opportunity for IoT to not only expand its own growth but also fundamentally change the way the world works. Once networks can connect at 5G speeds, utilities operating through wireless networks will become cheaper and easier to operate—allowing for the ability to connect new utilities, such as security and lighting, to wireless networks. This will usher in a new era of smart homes and even smart cities, connecting more and more devices to wireless networks.

5G Expansion

As 5G becomes a large part of our world, MVNOs are determined to ride its wave of success. In the coming months, U.S. consumers will be inundated with promises of ultrafast speeds and massive capacity due to 5G. And 5G is expected to deliver—Verizon has measured 5G speeds at 200x faster than its 4G LTE network. Outside of typical wireless uses for consumers, experts predict 5G will play a role in expanding the use of artificial intelligence and augmented reality computers. Even cable companies are riding the crest of 5G—last year, Comcast and Charter announced that they will both offer 5G through their MVNO agreements with Verizon. So far, Comcast has added 1.6 million lines of service since launching its Xfinity Mobile MVNO in 2017, giving 5G access to an additional 1.6 million devices (and their users) across the U.S. Right now, Verizon is the current leader in 5G, having rolled out 5G wireless for consumers in the test cities of Chicago and Minneapolis.

For most of the country, 5G still resides in a sci-fi movie. As 5G becomes commonplace and wireless carriers begin implementing it throughout the country, MVNOs will look to take advantage of the opportunities it provides by developing policies and services to help consumers stay on top of increased connectivity. The increase in connectivity will also increase the need for consumers to trust their wireless providers. If MVNOs continue to keep prices low and provide top-notch customer service, consumers will continue to choose MVNOs to keep them connected.

Categories: Warranty Solutions

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