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Get to Know an MVNO. It Could Save you Millions

Last updated by on 15 Comments

As we just discovered, the lifetime cost of smartphones is enough to make you question the meaning of life.

But why are prices so high and seemingly on the rise when the cost of data transfer should be declining? For starters, there is a lack of competition to keep prices down.

In fact, there are only four legitimate mobile national network operators left in the U.S.:

  • Verizon (115 million subscribers)
  • AT&T wireless (107 million subscribers)
  • Sprint/Nextel (56 million subscribers)
  • T-Mobile (owned by the German Deutsche Telekom) (43 million subscribers)

These four own a majority of the wireless spectrum from which almost all mobile/data plans in the U.S. run. There are a few other smaller network operators such as Leap (Cricket) and U.S. Cellular (each with about 5 million subscribers) – but it’s probably only a matter of time before they are bought up by the big 4.

Remember Alltel, which operated in 34 states? Bought up by Verizon, and reduced to operation in 6 states. Consolidation is the trend, because consolidation = lack of price competition and more wireless spectrum gained by the buyer.

Except, when it comes to MVNO’s.

M what?

What is an MVNO?

mvnoMVNO = mobile virtual network operators.

MVNO’s do not own wireless spectrum, like the big 4 do. They buy up network access from the big 4 at low rates. And then charge customers whatever they like.

Most MVNO’s know they can’t compete with the big 4 directly:

a. they don’t have their own network, so what is their selling point?

b. they don’t have huge ad budgets

So who do MVNO’s compete with? Each other. And what do they compete on? Price (almost all MVNO plans are prepaid plans), and therefore, they run on extremely low margins. As a cost conscious consumer, you win. You aren’t paying for a brand name, huge ad campaigns and associated acquisition costs, subsidized expensive smartphones, deadbeat customers who don’t pay (most MVNO’s are prepaid), retail stores with staff, the cost of building new towers, servers, and a huge network, or any of that stuff.

You pay slightly above the wholesale rates at which network access is bought by the MVNO.

In fact, customers of the big carriers pay about 3.4X the amount of customers of MVNO’s. And if you’re smart about choosing an MVNO plan, that difference is more like 10X.

And here’s the beautiful thing. You’re using the same damn networks!

  • Republic Wireless, Virgin Mobile (owned by Sprint), and Boost (also owned by Sprint) – all run off of Sprint’s network.
  • Airvoice? AT&T.
  • PagePlus? Verizon.
  • Tracfone, Net10, and Straight Talk (all owned by America Movil)? They run off of Verizon, AT&T, Sprint, and T-Mobile, depending on phone and location.

So that “reliability” that the big 4 touts in their ad campaigns is really just an MVNO away.

MVNO’s Fulfill Most Needs & Most Wants (Very Cheaply)

In my opinion, the true value of a smartphone plan is limited.

Here’s what I want in a mobile phone plan:

  • decent amount of talk/text minutes, so I don’t run out
  • a full QWERTY keyboard for texting or emailing
  • memory enhancement capabilities (memory card upgrade), so I can turn the phone in to an mp3 player with a huge library
  • wifi capabilities so I can stop at a free wifi hotspot and jump on the web, if needed

Whether it’s a dumbphone or a smartphone, it doesn’t really matter, as long as it can do these things. Navigation on a phone is nice, but I can get that with an old school GPS for $75. Everything else can wait until I have a much more convenient full keyboard and large screen in front of me.

Lets put it in the perspective I mentioned in the last article. Up until the mid 90′s, in the entire history of the human race, very few people had a phone at all. And when they did, it didn’t have mp3, full keyboard, or wifi capabilities. Just numbers and a call and power button. And for this phone that was no more advanced than a home phone, they paid $50+ per month for service.

20 years later, all of those wants I listed (above and beyond mid 90′s cell phone capabilities) can now be had for less than $10 per month!

Paying $115 per month for a smartphone plan seems absurd, when you look at it with that perspective.

A List of the Best MVNO’s

I decided to put together a list of the MVNO’s to get you started. This list blends the largest companies with the best reputations and most affordable plans.

These plans (outside of Republic Wireless) are really designed for those who don’t want to use mobile data, in order to keep costs low. There are cheaper mobile plans out there than the ones the big 4 offer.

MVNONetwork(s) UsedOwned ByCheapest Prepaid PlanNotes
TracfoneAT&T, Verizon, T-Mobile, SprintAmerica Movil$6.66/mo. min., pricing plans vary.Get a "triple minutes for life" phone to cut cost of minutes.
Republic WirelessWifi, then SprintBandwidth$19/mo. unlimitedUses wifi, then switches to Sprint. Must buy new pricey Android phone.
PagePlusVerizonRecently sold to America Movil$2.50/mo. min. $0.04-$0.10/min., $0.05/SMS, $0.99/MBWith America Movil purchase, changes are likely ahead on pricing.
AirvoiceAT&TAirvoice$10/mo. min. $0.04/voice, $0.02/SMS, $0.33/MB. Pay as you go plan also available.You can actually run an iPhone with Airvoice.
Talk For GoodVerizonTalkFor Good$6/mo. 30 min., 30 SMS, 5 MBCompare to PagePlus (both run on Verizon)
PTelT-MobilePTelPay as you go. $5/mo. min., $0.05/voice, $0.02/SMS, $0.10/MBCompare to Lyca (both run on T-Mobile)
Lyca MobileT-MobileLyca Mobile$0.02/voice, $0.04/SMS, $0.06/MBVery low rates.

MVNO Discussion:

  • Which MVNO or prepaid wireless plan do you use, and how much are you paying?
  • Do you refuse to use an MVNO? Why?

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About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.

  • Jake @ Common Cents Wealth says:

    This is a nice overview. If you are fine with what these carriers provide then they are great options. My wife has Family Mobile through Walmart (probably not an MVNO) which offers her everything Sprint did for $30 cheaper a month. She really likes it so far.

  • Nice breakdown. I used Straight Talk for some time, but ended up not liking their policies. I am looking into Republic to test it out. I want to see how it runs because I like the concept and how they are trying something new. MVNO’s are awesome, but most people want jump ship because they hear the word prepaid and they think it is dirty.

  • Zach says:

    I’ve used Net10 ($25/mo) for several years and have rarely had coverage issues/dropped calls. My wife uses Republic Wireless ($19/mo) – wi-fi is great – sprint network is spotty at times – can’t beat the price on both plans. Here’s a TIP, always look at recurring monthly expenses by their annual cost vs. monthly cost. I think this helps one put expenses in true perspective and decide what is necessary and what can be trimmed from the budget.

    Great website.

  • Derrick says:

    Ting Mobile!
    Networks Used: Sprint, Verizon (Voice-only roaming)

    Owned By: Tucows

    Cheapest Plan: 6/mo for phone service, $0.03-$0.017/min, $0.03-$0.002/sms, $0.03-$0.02/MB

    Notes: They break your rates out by minutes, text messages and megabytes and bill you at the end of the month for whichever “buckets” you fall into (Ex: Small Min, Large SMS, Medium Data = $30/mo). Bring your own Sprint phone; otherwise purchase.

    I’ve been saving over $30 every month. It’s already paid for our phones and termination fee from Verizon!

  • I have Republic Wireless and I’ve been very satisfied with them – for me it works as well as advertised! Not having a choice over a phone wasn’t a detriment for me but I know it is for some. I pay $22.25 after taxes, but so many people have been using my referral link (see my review linked above, at the bottom) that I have many free months lined up!

  • rw says:

    I have T-Mobile and pay about $99 a month after taxes and fees. Which is for an unlimited everything plan. I would switch to one of these, but I have to keep unlimited data for work purposes. At least I get a tax write off. I’ll consider these options in the future for family though. Thanks!

  • Jared Haines says:

    There’s nothing special about MVNOs. The issue is prepaid service vs. postpaid service. Check out the prices on T-Mobile and AT&T prepaid monthly plans. As for MVNOs, though, you might add Simple Mobile to the list.

  • Chris Smith says:

    EXCELLENT article. I use Boost Mobile, very satisfied. Starts at $45/mo, after 6 months (assuming you pay every bill on time, throughout), it drops to $40. 6 more months, drops to $35, where it stays thereafter. It’s called “shrinkage” – and I love it because it’s the flat out opposite of the “mysteriously increasing monthly bill even though I’m supposed to be on a contract” that I used to invariably experience with the big 4.

  • Shaun says:

    Interesting article. I am curious on people’s opinion of my situation.

    Most of my family and friends live in Canada and I live in Michigan. I am currently using Verizon as it is $10 more per month to include all calling and texting to Canada and while I am in Canada.

    Is there an MVNO option that would have an add on monthly fee to include calling/texting to and while in Canada?

    I have not heard of one yet but I may have been looking in the wrong spots.


    • Leigh says:

      If you have an Android phone, look into the Google Voice app. It makes calls to Canada free, if you use it properly. With Sprint (and Ting since it’s a Sprint MVNO), texting to/from Canada while in the US or Canada is free.

  • Natalie H says:

    I was a Cingular/ATT customer for 10 years before I switched to Airvoice wireless’ $10/month plan (an ATT MVNO). I was really nervous about the change but I’ve been using them for about 6 months now and I haven’t noticed a difference in service. My only complaint is that I have to manually renew on their website each month and I sometimes forget and go a day or two without service before I notice. The first time it happened the day before Christmas and was really annoying. However I do get service back within minutes of ordering on their website and they seem to be implementing an automatic renewal option, although it hasn’t worked for me yet. Overall, for a very light user, it has been wonderful.

    And, if you are worrying about data/smartphone, they allow any phone on their service that will take their sim, including locked ATT phones, but data service is expensive. Luckily data is locked by default, you have to call customer service to enable it. I bought a cheap ($55) unlocked dual sim world phone 6″ tablet and my husband and I share it. I have data anytime I’m at home with my wireless network and anytime I’m in a place with free wifi. So, If I’m out and need to look up something right away I just pull into a Starbucks or McDonalds parking lot.

    Between this cell phone plan and Google Voice for a landline, I pay a total of $10 per month for all phone service for my household.

  • Michael says:

    I use Red Pocket I have the unlimited voice, text, and 2GB for $59.99 (tax included if any) a month. Keep in mind this service is great for people who DON’T rely on their smartphone to stream HD videos or you’ll hate the service.

  • thomas smith says:

    I have been using H2o which is on the att system $28 month unlimited voice / text

  • Alejandra says:

    I am searching for a better option that allows you to make calls to Mexico. Currently I have an AT&T family plan that is super expensive, even with my company discount… I would love an MVNO but calls to Mexico are a must. Any suggestions like the service to Canada?

  • ZeropopulaR says:

    Freedom pop offers 19.99 unlimited data text n calls.. or free limited plans to certain areas


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