Are Cellcos Creating Their Own Competitors?

A new survey found that 80 percent of cellular subscribers would consider buying service from "virtual" cellular operators.

January 30, 2006

1 Min Read
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In an indication that cellular operators are creating their own competition, market research firm In-Stat Monday released a report saying that 80 percent of cellular subscribers would consider subscribing to mobile virtual network operators (MVNOs).

MVNOs are cellular operators that don't have their own infrastructure but, rather, buy bandwidth from existing cellular operators. Typically, MVNOs appeal to specific market niches, such as ESPN Mobile, which appeals to sports fans, and Amp'd Mobile, which appeals to young adults.

The study, which included a survey of cellular subscribers, noted that customers of what it called "smaller U.S. national carriers" are most to switch to an MVNO. This indicates that T-Mobile USA might be the carrier to suffer the most from this trend. The larger U.S. carriers, Cingular and particularly Sprint and Verizon Wireless, are selling bandwidth to MVNOs.

The study noted that more than two-thirds of all U.S. residents are currently cellular subscribers and that there are now more than 20 MVNOs in operation in the U.S.

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