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The Real Cost of a Carrier vs MVNO’s

January 28, 2016 - Written By Alexander Maxham

When it comes to wireless carriers, there are many choices available out there. Many more than just the four national carriers which are AT&T, Sprint, T-Mobile and Verizon. But also MVNO’s (Mobile Virtual Network Operator) or prepaid carriers. MVNO’s can offer cheaper prices on plans because they aren’t paying to keep up a network. What happens here is that the MVNO pays the network a certain amount to basically lease their towers and allow their customers to use that network. This is why they can offer cheaper plans, and ultimately the same coverage. So why doesn’t everyone go to a MVNO? Well there are a few disadvantages here. The biggest one being priority on the tower. If you’re in a crowded area, MVNO’s and prepaid users get slower speeds, as the postpaid customers get priority over the other customers connecting to the tower.

Cinch Financial put together some data on plans between the big four carriers versus other MVNO carriers, which run on their networks. Some MVNO’s like Straight Talk do run on multiple networks as well. Looking at the data, most of the time the MVNO is cheaper. In their example they compared T-Mobile with MetroPCS, and their prices are almost the same for 2 people, 3 and 4 as well. The same thing goes for Sprint versus Boost Mobile. However looking at AT&T versus Cricket, it’s clear that Cricket is a much better deal – AT&T does also own Cricket. Page Plus is also a much better deal than Verizon’s prices.

Outside of priority on the tower, what’s the other reasons that many are not using MVNO carriers such as Cricket, Page Plus, MetroPCS, Boost Mobile, Straight Talk and the many others out there. One reason is likely advertising and a retail presence. You see Verizon, AT&T, Sprint and T-Mobile everywhere on TV and everywhere you go. But when was the last time you saw a Page Plus store? For most customers, they don’t even know these carriers exist. There also aren’t any financing options and often times their device portfolio is a bit lacking. Many of these carriers have one or two true flagship devices, typically the latest Galaxy S from Samsung or the latest iPhone from Apple. Otherwise they are all pretty cheap smartphones. And that’s because they are not financing them or signing you to a contract, so you’re paying full price. Many customers don’t want to come in and drop $400 on a new smartphone when they sign up for new service.

There are many advantages, however to using these MVNO carriers. Aside from price, many of the phones are unlocked (because you are paying full retail so they are not SIM locked) allowing you to take them across the world and use them with other SIM cards without a problem. Many MVNO’s don’t have as many fees and surcharges as the bigger carriers. So when they say your price is $30, they mean $35 max, not nearly double that price. The biggest advantage is being able to bring over your own phone. If you buy the Moto X Pure Edition, Nexus 5X or Nexus 6P, you’ll be able to take it to any carrier, because it does support all four networks (yes even Sprint and Verizon). A big advantage there for many people.

Take a look at the graphs below for yourself and see how much cheaper these smaller carriers truly are. Coverage isn’t an issue with them, as they are covered by contracts with their parent company, whether that be AT&T, T-Mobile, Verizon or Sprint.