MVNO renaissance: Will the new breed of virtual operators survive?

Sue Marek

There's a new school of mobile virtual network operators that have made their debut during the past couple of years offering innovative price plans, compelling devices and alternative distribution methods. But what makes these latest MVNOs--like Solavei, Ultra Mobile, FreedomPop, Ting and Republic Wireless--interesting to me is that they are being courted by their operator partners. 

Wireless carriers today are willing to help MVNOs with their customer service, billing, device procurement and even marketing in return for the additional customers they bring to the operator. This open attitude toward MVNO partners is a dramatic change from the 2005-2006 timeframe, when we saw so many high-profile failures like ESPN Mobile, Disney Mobile, Amp'd Mobile and Helio. Back then, MVNO-friendly operators like Sprint (NYSE:S) were willing to open up their network to the virtual operators, but they didn't want to help their MVNO partners acquire the devices or run the backend systems necessary to operate a wireless business.

I spoke with Matt Carter, president of Sprint's wholesale and emerging solutions business, who said that MVNOs are good for the company because they help Sprint get more subscribers on the network. And in today's saturated wireless market, getting more customers is key. "Postpaid growth is slowing dramatically," said Weston Henderek, principal analyst with Current Analysis. "This is how operators can keep growing their subscriber base."

But the MVNO model is still risky. Henderek predicts that some MVNOs will go away and others will consolidate. But he also predicted MVNOs will continue to experiment with different types of rate plans and promotional packages.

I delved further into this latest resurgence of MVNOs in this article. Hear what Sprint's Carter and T-Mobile's Doug Chartier have to say about their MVNO strategies.