Why a Mobile Virtual Network Operator could save you several hundred dollars a year
Are you overpaying for your cell-phone plan due to inertia to switch providers? A recent consumer reports survey by ConsumerReports.org found that customers had been with their existing provider for an average of eight years, and more than half of consumers who recently switched providers saved $20 or more a month.
If you are an HBS student you probably have a post-paid account with one of the four major providers (AT&T, Verizon, Sprint and T-Mobile) and pay upwards of $60/month. Did you even know there are actually dozens of other smaller pre-paid MVNO (Mobile Virtual Network Operator) providers that offer comparable service at $30/month? They lease coverage and data bandwidth from one of the bigger providers (typically T-Mobile or Sprint). The MVNO runs on the same cell towers and infrastructure as the bigger provider, but has a distinct brand, plans, stores, and customer service. They are ‘virtual’ in the sense that they do not own any physical hardware.
Why are MVNOs becoming popular?
Devices are no longer subsidized: Historically consumers were tied to 2-year contracts with providers that included a subsidized phone. This made it a high barrier and fairly cumbersome to switch providers. Now devices are no longer subsidized by the providers – and you typically pay a separate monthly payment for your provider. In nearly all cases you are now better off paying for your phone upfront and choosing a provider.
MVNOs now offer the latest phones and features: Historically MVNOs were restricted in the type of phone and features they could offer on their network – for instance they could not offer high speed today. Today, the scenario is quite different – MVNOs offer the latest phones and features like Long-Term Evolution (LTE), which enables high-speed wireless data transfers.
Is a MVNO right for me?
MVNOs are slightly less feature-rich that full service providers. For example, they typically do not have international roaming. In addition MVNO customers may receive less priority on provider networks in case of network congestion. Having said that, MVNOs offer some great cost savings and the flexibility of no long-term contracts. So if you are a no-frills customer looking for a cost effective reliable service then a MVNO could be a great fit. You also have to buy your own phone upfront.
A few leading MVNO operators:
|Provider||Parent Network||Monthly Plans||Notes|
|Cricket||100% AT&T Subsidiary||Talk/text/1GB for $30||Data capped at 8 MBPS
$5 discount w/autopay
$50 Plan has free roaming in Canada and Mexico
|Talk/Text/2.5GB for $40|
|Talk/Text/8GB for $50|
|H20 Wireless||AT&T||Talk/text/3GB for $30||Free international calling
10% discount w/autopay
|Talk/text/8GB for $40|
|Google Fi||Sprint/T-Mobile/WiFi||Talk/Text for $20.
Data costs $10/ GB
|Data roaming in 120+ countries.
Works only with Nexus Phones
Can I keep my existing number?
Absolutely, number portability is a very simple process explained by each carrier.
What do I do in case I am travelling internationally?
I would recommend you buy a local sim card when you land. Often, you can order sim cards in advance online in the USA, such as through Ebay. A particularly attractive option is to a buy a sim card from 3 (‘3’ is a brand of a British operator, three.co.uk) which works in 42 countries and has free data roaming.
Hari Sathyendran (HBS ’18 & HKS ’18) is a recovering management consultant who proudly inherited the role of Tech Rep of Section B. He enjoys hosting dinner parties with a focus on South Indian cuisine and traveling the world to enjoy authentic local food.