An MVNO by any other name...
The And Finally... item in yesterday's newsletter garnered quite a response. It read: "Your daily dose of wireless trivia: What was the name of the first MVNO to commercially launch operations in the U.S.?" Within minutes of the issue's delivery, we received a flurry of emails, and I soon realized that the consensus would not match my original answer.
I should have defined "mobile virtual network operator" (MVNO) when I asked the question. MVNO, surprisingly, is still a somewhat inexplicable term within the industry. So what does "MVNO" mean? Perhaps, this trivia question will help us find out.
Michael Sumitra of Convergys was the first to write in with what I believed to be the correct answer: Tracfone, which launched commercial operations in May 1996. But Sumitra was quick to point out that Tracfone uses multiple networks (including Cingular Wireless, Verizon Wireless and several regional carriers). The vast majority of respondents picked Virgin Mobile USA as the first commercially launched MVNO in the U.S., probably because these respondents considered Tracfone to be a "reseller." Ah, you're beginning to see the slippery slope I found myself on last night.
Current Analysis senior analyst Weston Henderek helped shed some light on the issue: "The definition of MVNO is such a grey area. But if you use the strictest definition: A company that uses another company's network to offer a wireless service under its own brand, then Tracfone would be the first MVNO." Indeed, those respondents who worked for carriers picked Tracfone as their answer: including Martin Marshall from Verizon Wireless and Joe Hoffman from Cingular Wireless (now AT&T).
However, Henderek had quite a few caveats: While Tracfone's service is nationwide, each of the handsets it sells only work in certain areas. Tracfone initially leased space on both CDMA and GSM networks, so the incompatibility and subsequent "incompleteness" of its offering is understandable. Today the company is focusing more on its GSM offering. That said, must an MVNO be nationwide and use a consistent air-interface technology? If not, then maybe Select Communications' Mark Jenkins' answers are worth considering: Progressive Concepts, Inc. (PCI), which incorporated in 1994 or ComTech, which launched in 1995.
But the popular response--Virgin Mobile--still needs attention. The advent of the term MVNO occurred at the same time as Virgin Mobile's genesis in 2001-2002, so on the etymological side alone, Virgin should receive the title as the first MVNO to launch in the U.S. Henderek noted that Virgin Mobile was the first MVNO to have their own pricing, national branding and a well-established network (Sprint), which provided a service that worked on any handset it sold nationwide. Yes, that pretty well defines an MVNO as we currently know it.
As for the trivia question: In my opinion, Tracfone still remains the first national MVNO to launch commercial operations in the U.S. It may have been "incomplete," but no carrier seriously boasts "total" coverage. In 1996, it may have been known as a reseller, but the term MVNO has superseded that one and will continue to do so. -Brian