MVNOs vs. major carriers: Understanding the key differences before you switch

Q: What are the technical differences between the low-cost cellular companies and the major carriers?

A: If you’re considering a switch from one of the big three carriers (AT&T, T-Mobile or Verizon) to a low-cost cellular provider, there are some important technical and customer service differences to understand.

These trade-offs may or may not be worth the savings once you’ve evaluated them.

What are MVNOs?

Popular cellular companies such as Mint Mobile, Straight Talk, Boost Mobile and Google Fi are known as Mobile Virtual Network Operators (MVNOs) because they don’t own their own networks.

They lease access from one or multiple major carriers which lowers their operating overhead and allows them to offer lower cost no-frills plans.

In some cases, the low-cost provider is actually owned by one of the major networks: Cricket Wireless is owned by AT&T, Metro and Boost Mobile are owned by T-Mobile and Straight Talk, Total, TracFone, Page Plus and Visible are all now owned by Verizon.

These ‘secondary’ providers typically don’t require a long-term contract and offer more pricing flexibility such as prepaid instead of postpaid accounts, but they also come with various limitations, which may or may not be important to you.

Data throttling

One of the biggest drawbacks of these secondary connections is that you’re given a lower priority over the large carriers primary customers. This can result in slower data speeds in congested areas, during high peak usage times or at large crowded events.

In addition, the low-cost providers may also implement significant data throttling after you use a predetermined amount of data or limit video streaming to lower resolutions to conserve bandwidth.

If consistent cellular data speeds is an important factor, switching may not be a good idea.

If you’re a heavy data user who currently has an unlimited plan with a major carrier, you should start by reviewing how much data you’ve averaged per month over the past three months. Most of the low-cost plans have smaller data caps which may not work for you.

If you use very little data because you’re always connected to Wi-Fi and rarely use data when you’re out and about, switching could make a lot of financial sense.

Limited Customer Support

Depending upon the company, support can range from online only to chat and phone with response times that can vary widely. MVNOs don’t include the support infrastructure the big carriers provide, so it’s important to know what’s available before you make a decision.

Roaming Limitations

Roaming refers to the ability of your cellphone to connect to a network that is outside of your home network’s coverage area, like when you travel to other countries. There may be both domestic and international roaming limitations you’ll need to explore if you travel often.

Google Fi, which uses T-Mobile’s networks is one of the MVNOs that offers international roaming with regular data speeds. Other providers offer the ability to purchase international credits or limit their coverage to Mexico and Canada.

Device Financing

If you typically sign up for a plan that allows you to spread the cost of a new phone over time, you’ll need to research how the MVNO you’re considering handles this or if they even offer an option.