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Elephants or ants: Will MVNOs make a dent in national carriers?

There is a revolution happening at the low end of the cellular market, with new operators launching services that cost less than existing data plans from the big four operators in the U.S. But can these startups grow large enough to change the way mobile data is priced and sold in the U.S.? That was the question that the CEOs of of three new MVNOs tried to answer at GigaOM Mobilize during a panel discussion with senior writer Kevin Fitchard.

Eliott Noss, CEO of Tucows, which launched the Ting mobile service, said it was likely that his company and other MVNOs would be like a “revenge of the ants,” as his and 50 other MVNOs innovated from the bottom up, but didn’t really disrupt the top players.

David Morken, the co-founder and CEO of, which operates the Republic Wireless service, vehemently disagreed, saying “I’m not an ant. I think Free [a French MVNO] is a great example of where the market is going.” Free launched a Wi-Fi based mobile phone service that has been highly successful in France. But Free also had sold a broadband product for years, so it already had an established customer base.

Morken, whose Republic Wireless service also makes use of in-home and in-office Wi-Fi to serve of the majority of the plan’s data, said that in 19 months he hopes to have turned the mobile market on its head. While he refused to answer questions about how much cellular data his users need each month, he told me in a conversation before the panel that the current usage allowed the company to be profitable. “If software is eating the world like Marc Andreessen says, it’s eating at a table set by Wi-Fi,” Morken said.

Check out the rest of our Mobilize 2012 coverage here, and the live stream can be found here.

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5 Responses to “Elephants or ants: Will MVNOs make a dent in national carriers?”

  1. Republic Wireless is not a serious business model. I, along with thousands of others, have been waiting for our ‘wave’ in order to get our RW phones. At the end of 2011, we were told to wait ‘a little while’, then it would be spring, then summer, then I stopped listening and bought a Ting phone (I even used the Ting code VTIMRR7 to get $50 off of a phone). I’ve had Ting for one month now and so far I am pleased with the service and their support team.

  2. I’m curious to see how MVNO’s like Republic work out here in the US. With it’s huge footprint and rural/suburban areas wifi is far far from ubiquitous outside of the major cities so I think a wifi driven network works much better in europe than it ever will in the US. MVNO’s have certainly been driving prices down, but the weak point continues to be data pricing which only continues to get worse. Some time ago I seriously considered switching my 2 lines to Straight Talk, but ATT came out with their data sharing plans which are actually quite close in pricing to Straight Talk, the only difference is I get 1gb shared with ATT, with Straight Talk it’s “unlimited”, but after some research it’s not really unlimited but 100mb/day and 1-2gb/month. For just a bit more I was able to keep the reliability of ATT and not have to delve into Straight Talk’s ambiguous “unlimited” data which throttles your speed if you go over their secret magical data usage number.

    The MVNO’s are a great thing though, especially if it drives prices down. The only thing I don’t understand is that all these MVNO’s purchase their minutes/data from the carriers themselves, if it came down to it wouldn’t the carrier just raise prices on them causing them to raise prices on consumers?

    Once again I think the true battlefield is on data pricing, with ATT and Verizon on one end making data pricing more and more expensive each year, and Sprint and Tmobile on the other end advertising “true unlimited” data usage. What I found interesting is that I used MUCH less data than I thought I did and adjusted my plan accordingly to save quite a bit of money.

  3. Hi from France
    Free is no MVNO but a true brick and mortar MNO – they got the 4th 3G license and operate their own network. To enhance their mobile coverage they us have a roaming agreement with Orange and use WIFI offloading whenever they can (each Freebox, their 3 play ADSL modem, acts like a hotspot and devices like iPhone use EAP SIM authentication to connect transparently)