Wednesday, January 23, 2013

Is the wireless cartel showing signs of cracking?

For some time, we have seen the rise of MVNOs (mobile virtual network operators) -- companies that resell mobile access on nationwide networks. (I personally use an MVNO, Ting.com).

I have been parochial, watching only US MVNOs, but the same thing is happening elsewhere. For example, Phones4U will launch an MVNO, LIFE Mobile, in March, using EE's network in the United Kingdom.

In the US, super retailer Walmart is offering mobile connectivity through Straight Talk for $45 per month. They are advertising unlimited service, but will evidently slow data transmission when a yet-unspecified limit is reached during a month. While the terms are still unclear, the presence of Walmart in a market will lead to very aggressive pricing.

Today, MVNOs are living off the fat, the oligopoly profits, of their wholesale providers, but their aggressive pricing and plans may end up forcing all prices down.