Should Enterprises Use An MVNO Such As Cricket or Mint Mobile?Should Enterprises Use An MVNO Such As Cricket or Mint Mobile?
Business executives question why enterprise services cost so much more per user than consumer service does.
January 14, 2025
New business models disrupt industries as much as new technology. Enterprises and cellular providers should take note. The number of mobile virtual network operators (MVNOs) is increasing to over 100 in the U.S. with a market share around $15B, representing 7% of cellular subscribers. Cost conscious enterprises are starting to use MVNO services and not paying the premium for AT&T or Verizon.
The 1996 Telecom Act requires, among other things, that incumbent communications providers offer their services at a cost-based wholesale rate. Mint Mobile is an example of a MVNO which uses T-Mobile wholesale and charges $15/month per subscriber. Cricket Mobile is a subsidiary of AT&T and offers heavily discounted plans.
The network service providers (NSPs) have struggled for years between selling their services directly via a retail model versus selling them wholesale. Twilio, Bandwidth, MetTel, Granite, Expereo and many CPaaS vendors have been successful in buying wholesale network and telecom services, then repackaging them with a simple user interface and underselling the NSPs retail services. Additionally, NSPs have a reputation of being difficult, slow, and expensive to work with directly. Although NSPs are trying to differentiate themselves, this is becoming more difficult as telecom services continue to become commoditized. The same applies to the mobile/cellular market.
The reason that AT&T, Verizon, and to a lesser extent T-Mobile should take this threat seriously is that unlike traditional MVNOs that targets the cost-conscious consumer, some MVNOs are going after the higher end of the market -- including the enterprise. 20 years ago, the debate was whether the NSPs would be application service providers or just bit haulers for communication services such as voice and video. Today, NSPs are primarily just bit haulers, and if they are not careful in another decade, they would become commoditized wholesale bit haulers.
As mobile/cellular services become commoditized and coverage improves, enterprises should do the following:
Stop providing guest WiFi – I wrote about this a few weeks ago as seen here.
Stop paying $40/month/user - $15-20/month/user is the competitive rate. The large enterprise carriers (AT&T, Verizon) and leading MVNO’s offer integration with communication and security services such as Microsoft Teams and Mobile Device Management (MDM) that can be a value added service.
Stop allowing Bring Your Own Device (BYOD) – Security is paramount, and user owned devices is a threat vector along with a way for data to leak outside the enterprise.
Stop using text messaging – Short Message Service (SMS) is not secure. It is not encrypted, SIM hijacking can temporarily take over service, and information can be subpoenaed.
Stop signing multi-year contracts – The market is dynamic, and prices are coming down year over year.
In the SMB space, many enterprises are finding the bundling of all network and communication services as a way to save money. Comcast for instance offers a bundled service for the enterprise that includes Internet, phone, and cellular services along with add-ons for security and features. The old saying, “40% of the phone bill is the phone bill,” also applies, so bundling communications services together saves both the enterprise and provider money. Comcast is an MVNO that uses Verizon wholesale cellular.
It would not surprise me if in 5-10 years, mobile/cellular services were bundled into a bigger service offering. Microsoft, Google, Amazon could easily bundle this service into their offerings. Again, new business models change the market as much as new technologies. Zoom, Slack, and other communication providers came to be largely because of their Freemium business model.
So, the advice is not to necessarily move away from your current mobile/cellular provider, but to be aware that it is a very competitive market with little differentiation. The 10/25 rule applies here. If your incumbent contract is within 10% of the competition, stay with them. If the delta is greater than 25%, then switch. If it is between 10-25%, consider other factors based on the enterprise’s priorities.
