MVNOs Are Taking Over Prepaid

MVNOs

Wireless Wisdom

An MVNO is a Mobile Virtual Network Operator. While most MVNOs run on prepaid services, it is not impossible to find post-paid packages.

A prepaid service – also referred to as Pay-As-You-Go – is a service in which credit is purchased in advance in order to utilise it. This differs from a post-paid service in which payments are made at the end of a stipulated time. While prepaid services come in plans, post-paid services are calculated based on actual use of service.

MVNOs work by leasing – and sometimes sharing – cellular coverage and bandwidth with larger telecommunication brands. The larger companies provide the wireless network infrastructure to which these MVNOs create their ‘virtual’ network around and then resell to consumers.

A Telecommunication Infrastructure

A Telecommunication Mast. Source

Why the Popularity?

MVNOs have continued to rise in popularity since they were first introduced to Australia in 2000, the first being Virgin Mobile.

According to Roy Morgan, the six months to December 2018 recorded over 6.7 Million Australians using prepaid phones, a rising share of these acquired via an MVNO. These Virtual providers are now currently used by about 2 million Australians.

Since MVNOs are directly linked to larger telecommunication corporations, inherently offering services via these corporations, one may ask why they are so popular these days. The answer? Many reasons!

The Australian mobile market is currently very competitive. Many Australians today crave low cost cellular plans – a problem MVNOs tackle with ease. While larger brands – Telstra, Vodafone and Optus – provide the infrastructure with which MVNOs base their operations off of, the fact that they are able to sell similar services at much less cost and hassle keeps MVNOs a step in front of MNOs (Mobile Network Operators) where consumers are concerned.

The increasing preference of prepaid mobile services over post-paid ones in Australia can actively account for the rise in MVNOs. Many network users want to be able to plan their monthly mobile service bills and prepaid services let them do that with ease.

The combination of low-cost and service structure in MVNOs have made them very popular across the continent.

Besides these factors, MVNOs come with a quite the few advantages. Let’s take a close look at some of them.

Pros

The increasing popularity of MVNOs over traditional cell service carries in the last couple of years can be accounted for by some of items listed below:

  • Cost – MVNOs offer network plans which are more cost effective than traditional cell phone plans. Taking into consideration the financial differences of its consumers, MVNOs are able to create the best possible services to cater for a range of financial capabilities. They let you get much more for less!
  • Variety – There are a multitude of MVNO plans to be chosen from at any given point in time. These plans are tailored to suit the different needs of a wide pool of consumers based on a number of factors inherently balancing cost and services provided. The ball is in your court! (You can take a look at some available plans here.
  • Plan Flexibility – MVNOs allow users remain flexible with their cell service plans. Plans are renewable by the month so should a consumer find they are dissatisfied with their current plan, on its expiry, they can opt for a new, more fitting one. These plans do not pan out for lengthy periods of time as traditional cell plans usually would.
  • Accessibility – MVNOs are extremely accessible! You do not need to go to a physical store to access their cell services because they do not have these stores. They are ‘virtual’ network providers. You can access MVNO plans from the comfort of your home or anywhere with sim cards being delivered upon payment between 1-3 business days.
  • No Contract – Yup! That’s right! MVNOs do not require users to sign binding contracts for up to two years – as with most prominent telecommunication brands – to access their services.
  • No Credit Check – Unlike traditional cell providers, getting an MVNO sim will not require a credit check from the service provider.

Amaysim, An MVNO Service Provider packaged sim.

An MVNO Sim. Source

Cons

As with everything in the world, MVNOs come with certain disadvantages. Though the advantages vast outweigh the disadvantages, it is important to keep these in mind when opting to subscribe to an MVNO service.

  • Restriction – Due to the fact that MVNOs operate under lease with a larger brands, their consumers do not always have access to the full range of offers afforded by the network.
  • Physical Services – MVNOs function virtually; they have no physical stores or outlets consumers can visit in the event of a service problem. While this is not usually a hindrance to services, it may prove a problem when clients are not getting satisfactory service through customer care centres.
  • Prioritization – Though MVNOs are linked to larger cell carriers, when the network is saturated – in cases such as natural disasters or emergencies – the primary consumers would take priority over the MVNO subscribers.

The advantages of MVNOs are set to keep them a consumer favourite in the Australian mobile market. Their ability to remain affordable while offering quality services to the average phone user will continually place them at the forefront of service provision. Truly, less is more.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.