What Is an MVNO?

If you’re a tech enthusiast, a bargain hunter, or a Deadpool fan, you’ve probably heard of MVNO phone companies like Mint Mobile, Cricket Wireless, or Google Fi. But what is an MVNO? And how do these companies offer such cheap service?

Here’s a quick crash course in mobile virtual network operators, better known as MVNOs.

What are MVNOs, and how do they work?

Mobile virtual network operators (MVNOs) are mobile phone providers that don’t own their own network infrastructure but instead pay big telecom operators like AT&T and T-Mobile to use their infrastructure. The MVNOs then use the bulk access they purchased from those phone companies to sell to their customers. Thus, a Mint Mobile customer will pay their bill to Mint Mobile, but their phone actually connects to the T-Mobile network.

All MVNOs build their services on top of one or more traditional cellphone carriers, but the amount of their own systems and technology they layer on top of that differs from company to company. Some MVNOs are little more than resellers for the big phone companies, while others will have their own SIM cards, bundles and promotions, customer service, and more.

The systems that MVNOs layer on top of their host network determine how much control they have over their own traffic and thus what kind of services they can offer their customers. This means that all MVNOs are not created equal, so it’s important to do your research before signing up.

Pros and cons of MVNOs

Pros of MVNOs

Cheaper monthly cost: Switching to an MVNO can dramatically decrease your phone bill. SIn my case, since I primarily use Wi-Fi calling, switching from a traditional carrier to an MVNO dropped my bill from well over $100 to an average of just over $20. Even those who want a plan with unlimited 5G data can probably get one from an MVNO for about half the cost with an MVNO.

Simple billing: Plans from traditional carriers cost so much more than MVNOs in part because it’s not always clear what you’re paying for. Many of the extra perks that come with mobile plans aren’t actually free—they’re just lumped into your bill in an unintuitive way. The phones themselves are usually the biggest culprit, but it can get messy once you start adding additional lines or bundling internet, cable, or streaming services, it can get messy.

Most MVNOs don’t offer these perks to begin with, and some allow you to prepay, so you know there won’t be any surprises.

More device options: Since you’re not buying your phone through your mobile provider, you aren’t limited to the models that carrier offers. This means you have the freedom to get this year’s fanciest new cell phone or stick with the reliable one you’ve been using for years. A, and it won’t impact your bill either way. Some features (like 5G) require phones that are compatible with the technology, so be sure to check with the provider before switching.

Cons of MVNOs

Higher up-front costs: While we’re not on board with the idea of selling you a loan and calling it a free phone, being able to finance a device that costs several hundred dollars can be really helpful. Although you’ll end up paying more in the long run, there are times when financing your phone is the better option.

Some MVNOs, like Mint Mobile, offer their service as prepaid plans, and, as you’d expect, you get the best deals when you buy more months up front. Lots of people don’t have the cash on hand to pay for a year of service up front and potentially buy a new phone.

Fewer features and perks: With an MVNO, your phone plan probably won’t come with a phone, a free month of Hulu, or a coupon for Apple Music. In most cases, this is a non-issue. As we’ve discussed, if you want a phone or a streaming subscription, it’ll still be cheaper to go with the MVNO and buy everything else you want separately.

Know thatThe only things you don’t have control over are the deals the MVNOs make with their host network. For example, some MVNOs can have their data deprioritized during times of congestion so that the host network’s customers don’t experience lower speeds. You might have restrictions on hotspot data or video streaming (RIP net neutrality) that customers of the host network don’t have to deal with.

Fortunately, the big MVNOs like Mint Mobile or Google Fi either have a pretty deal with their host network or are owned by their host network (Mint, Metro, and Ultra are all owned by T-Mobile). If you absolutely must have the fastest mobile internet at all times, the extra cost of a major carrier might be worth it to you. But in most cases, just be careful to read the fine print when choosing an MVNO, and you’ll be fine.

Most popular MVNOs

While you’ve probably at least heard of the more popular MVNOs, there are well over a hundred in the United States alone. These services differ not only in the host network they use but also in other features, such as their access to 5G, hotspot capability, and use of native Wi-Fi calling. Most major MVNOs offer these features, but it’s a good idea to double-check before switching.

Why are MVNOs so cheap?

If MVNOs are essentially middlemen buying network access from the big phone companies and then reselling it to their customers, how can they sell mobile plans far cheaper than the companies whose networks they use?

The main reason is that MVNOs are very specialized companies. They only do a few things, but they do them well. This means they have far less overhead and fewer employees than a nationwide telecom company.

MVNOs also have different business models and financial incentives. Traditional phone companies spent decades conditioning their customers to see them as a one-stop shop for everything—or perhaps more accurately, they tried to seem more like the same regional monopolies that phone customers had been used to since the 1980s.

For example, many people with traditional cell phone providers are used to just getting a “free phone” from their provider every two or three years rather than paying hundreds of dollars to buy their own. In actuality, the phone isn’t free; it’s just being financed through the provider, and the payments are figured into your monthly bill.

The phone you get from the company is usually a new, expensive model that you might not buy otherwise. While you usually have a choice of models, the fee you’re charged is often the same either way, so there’s no point in picking a cheaper one. You also probably wouldn’t replace your phone quite as often if it weren’t automatic. All this, combined with the financing, means that you have a lot more on your bill than just the cost of the phone service.

MVNOs don’t usually build all these extra costs into their bills. Many also adopt a prepayment model where you pay for several months upfront, which further allows them to reduce the cost. Additionally, most popular MVNOs have Wi-Fi calling enabled by default, so as long as you’re at home, work, or someplace with Wi-Fi access, you don’t have to use or pay for data at all.

The bottom line

MVNOs are a great deal. Full stop. I’ve been using one for almost a decade and never regretted making the switch. In addition to saving me thousands of dollars over that time, I haven’t had to deal with a pushy salesperson or a mysterious spike in my monthly bill—and that piece of mind might be worth almost as much.