The Next Generation of MVNOs Won’t Look Like MVNOs

Why the next wave of mobile growth may come from companies that do not consider themselves telecom operators

For most of the history of the MVNO industry, the business model has been fairly easy to recognize. Buy connectivity wholesale, package it into a mobile plan, put a brand around it, and go find subscribers.

That model is not going away. But I believe the next generation of MVNO growth is going to look very different.

Some of the most interesting companies entering mobile over the next several years may never think of themselves as telecom companies at all. They may be fintech companies, retailers, cybersecurity providers, healthcare companies, SaaS platforms, transportation companies, MSPs, IoT providers, or consumer brands.

They will not necessarily launch mobile service because they want to compete with the traditional carriers. They will do it because connectivity makes the product they already sell more valuable.

That is a subtle difference, but I think it could completely change the size of the MVNO opportunity.

The old question was: who wants to become an MVNO?

Historically, launching an MVNO meant making a fairly significant commitment to becoming a telecom operator. There were carrier negotiations, billing systems, provisioning, SIM logistics, taxation, compliance, customer care, usage management, and a long list of integrations that had to work together.

For companies already operating in telecom, that complexity was understood. For a retailer, software company, or financial services company, it could be enough to make the entire idea unattractive.

The technology and enablement layers around the industry are changing that equation. More of the complexity can now sit behind platforms and APIs rather than inside the company launching the service.

That means we should probably stop asking only, “Who wants to launch an MVNO?”

A much bigger question is, “What businesses would become more valuable if connectivity were embedded into what they already do?”

Connectivity does not have to be the product

This is where I think the industry gets particularly interesting.

A bank does not need to become a wireless company. It could include mobile connectivity as part of a premium account and make that account harder to replace.

A cybersecurity company could combine managed devices, security and connectivity into a single service. A healthcare company could ship a connected device that simply works when the customer turns it on. An MSP could manage connectivity alongside the cloud, devices and security services it already manages for a business customer.

A retailer with millions of loyalty members may look at mobile very differently than a traditional wireless startup. It already has the customer relationship, distribution, payment information, and brand awareness. Wireless becomes another way to increase engagement and customer lifetime value.

In each case, connectivity matters tremendously. But connectivity is not necessarily what the customer believes they are buying.

That distinction is important because it moves the conversation away from competing primarily on the price of a gigabyte.

The race to the bottom is not a strategy

MVNOs have historically been associated with lower prices. There is nothing wrong with offering customers better value, and price will always matter. But there is only so much differentiation available when the entire proposition is a slightly cheaper version of the same mobile plan.

If the primary reason a customer joins is price, another provider can (and most likely will) eventually offer a lower price.

The more interesting opportunity is to make connectivity part of something that is harder to compare.

If mobile service is connected to banking benefits, security, healthcare, business applications, loyalty rewards, content, transportation, or another product the customer already values, the decision is no longer simply $25 versus $30 per month.

The value proposition becomes the entire ecosystem.

That changes the economics of the customer relationship. It can change acquisition costs. It can change churn. It can create additional revenue streams. Most importantly, it gives the customer a reason to stay that has very little to do with how many gigabytes are printed on the rate plan.

The network itself may become less visible

There is another change happening at the same time.

The industry is moving toward a world where connectivity can increasingly be orchestrated across different access technologies. Cellular, WiFi, private networks, and satellite connectivity are becoming pieces of a larger connectivity layer. eSIM makes it easier to change profiles and networks without changing a physical SIM card. New satellite capabilities are beginning to fill coverage gaps that terrestrial networks cannot economically reach.

Over time, the customer should have to think less about which network is providing the connection.

Think about how we use the internet today. Most people do not want to make a technical decision every time their phone moves between home WiFi, office WiFi, and cellular. They simply expect the device to stay connected.

Mobile connectivity should continue moving in the same direction.

For the next generation of embedded connectivity providers, the network may increasingly become infrastructure rather than the brand promise. The customer buys the experience, while the technology underneath determines the best way to deliver it.

This expands the addressable market dramatically

If we define the MVNO opportunity only as companies that want to launch another wireless brand, the market is significant but still relatively narrow.

If we define the opportunity as every company that could use connectivity to improve its existing product, increase retention, create recurring revenue, or solve a customer problem, the market becomes much larger.

That includes companies that would never attend a telecom conference and would never describe themselves as an MVNO.

I believe that is exactly why the next phase of the industry could be so interesting.

The winners may not start with spectrum, rate plans, or even wireless. They may start with a customer problem and eventually realize that connectivity is one of the tools required to solve it.

The MVNO may disappear into the experience

We have spent decades building an industry around the idea of the virtual mobile network operator. The term is still useful inside telecom because it describes an important commercial and technical relationship.

I am not convinced the customer needs to know…or that they even care.

The best technology eventually becomes invisible. Customers do not celebrate an API call, a provisioning event, or a billing integration. They care that the product works.

The same may eventually be true for the MVNO.

The biggest opportunity for the MVNO industry may come from companies that do not actually want to become telecom companies. They simply want to make their existing products better, more connected, and more valuable.

And perhaps the ultimate evolution of the MVNO is when the customer does not know they are using an MVNO at all.