I seen ads for cheap cell service like ting or mint using T-Mobile cell towers. How is it financially viable for networks to share the same service but one is selling for significantly cheaper, especially since these cheap services often say that their service is just as good?
In: Technology
For one, wireless carriers oversubscribe the shit out of their network. If they can build a network that can support 500 concurrent calls, they’ll sell 5000 user accounts knowing that not everyone is going to be using the system all the time.
Selling off capacity to an MVNO (mobile network virtual operator) is a no-brainer. The mvno basically pre-buys bulk minutes or bytes (or is contractually obligated to buy) and they have to handle all of the support and customer service. So T-Mobile gets paid for use of their network, but the other company has to handle all the end user support.
They don’t really share. There is a company that owns the towers and they lease towers and capacity to the carriers.
The cost in towers is all about local access rights and property values. The companies that do this spend a lot of money negotiating real estate and getting services to the towers. Carriers just lease from there. Generally speaking carriers don’t own towers and don’t want to be in that business.
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