The New MVNO on the Block

Can New Mobile Service Providers Save Us From Complexity? Tello Goes For It

The battle for our mobile attention has put convenience and user experience on a pedestal and, as a result, a ton friction has been removed from our day-to-day activities: shopping, ordering food, banking, traveling… But it often seems that, to gain access to these conveniences, we have no choice but to wade through complex waters, aka mobile service providers. With two-year commitments, opaque plans and fee-tangled bills, many of the carriers that enable today’s celebrated mobile innovations are not, themselves, widely celebrated.

This is why consumers might want to pay closer attention to MVNOs (mobile virtual network operators). MVNOs give you access to the major US mobile carrier networks (AT&T, Verizon, Sprint, T-Mobile, etc.), but with their own pricing and packaging. For customers, that can translate to lower rates, more flexible contracts and better customer service. Representing a smaller segment of mobile subscribers (just one in ten US subscribers a few years back) and competing against powerhouse brands, MVNOs are the underdog in the mobile service space. This is why when a new provider enters the fray they need to work hard to stand out.

This is the challenge for the newly announced Tello. Tello runs on Sprint’s network in the US, but has been operating out of the UK for two years already. (The parent company, KeepCalling, has been around since 2002.) At the core of Tello’s US offering is a pledge for “No Fees, Whatsoever,” as in no activation fee, no overage fee, no processing fee or early termination. Tello plans can be fully customized, so you’re not paying for something you don’t use (fitting for those who don’t use their phones to, you know, make calls), and can be upgraded or downgraded easily if you find, for example, you’re hitting your data limit. Technically data is unlimited as speed is throttled down to 64kbps once you hit your limit.

Things that are also good to know, if you’re thinking about switching providers, is that you can choose to buy a phone from Tello, but there’s also the option to bring your own. As mentioned before, Tello is a contract-free service, but for those who prefer to avoid plans altogether, Tello has a Pay As You Go option that gives you the chance to buy let’s say $5 and use it for national and international calls or texts.

Of course, Tello isn’t the first provider to tackle the pain points of mobile service. Ting, for example, offers a plan that allows you to pay based on usage and carriers like T-Mobile often cover the cost of termination to facilitate switching. But scratching out every fee and keeping costs low—Tello has a customizable plan that starts at $5 monthly, or (if you want data) $9/mo for 100 minutes of talk, 200 texts and 200 MB 4G LTE—gives the company a fair chance to stand out.

Still, one of the bigger questions that comes to mind is, if MVNOs are presenting such competitive offerings, why aren’t a larger share of mobile providers using them? Is it a testimony to long term brand effects of TV advertising? Are consumers still tethered to brick and mortar, taking comfort in having a place to go if something goes awry? (Tello, for example, is exclusively online.) While these factors may have a big impact today, they may lose their foothold as new generation of cell phone users and cord cutters come to market. Tello may be ahead of it’s time—though given early adopters always seem to be ready for the next opportunity to assert their early adopter-ness, that may be an advantage unto itself.