John Mardini is just 22 years old, yet today he’s going to launch an MVNO (mobile virtual network operator) called Voyager Mobile. What will set his service apart from the competition? He’s going to charge just $19 per month for unlimited talking and texting or $39 per month for unlimited talking, texting, and data. Why is he doing this? According to an interview done by AllThingsD, John said: “It was just one of those things. I pay so much for my cell phone. I was thinking there has to be a better way to make it cheaper for everyone.”
Is John some sort of amazing businessman who sees something that no one else does? No. John’s just one of the many people who has signed a deal with Sprint to resell their service. John will even resell their devices. His “start-up” was funded by his friends and family, and he has already said that he plans to outsource everything he can to keep costs down. In other words, Sprint built the network, Samsung built the phones, someone in India will handle the tech support, someone else will handle the payment transactions, and all John has to do is throw up a website with a fancy logo and sit on hit butt while he collects cash.
If you’re wondering why MVNOs exist, then realize that operators have multiple streams of income. They make money off subsidies, they make money from selling you accessories, they make money by bundling applications, so they can afford to sell their service at a wholesale rate to someone else who will essentially be nothing more than a reseller.
We wish operators behaved more like their reseller counterparts and simply sold access to their network for such amazingly low rates. For them to do that however, they need to close their stores, stop spending millions on TV ads, and fire a hell of a lot of people.