Why do the major cellphone service providers like Verizon, AT&T, and T-Mobile benefit from owning “cheap” services like Visible, Cricket or Mint?

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Are these services extremely throttled? Are they on separate towers where the service isn’t as great? Please help me understand.

In: Economics

7 Answers

Anonymous 0 Comments

For the most part, they don’t own them, they lease the use of their network to them. It’s an additional revenue stream that consumes idle bandwidth. Their direct customers get priority so there’s very little cost to them. The term for these carriers is MNVO (mobile network virtual operator). In the cases where they do own them, it’s to capture a different market segment (budget users) that wouldn’t normally sign up for their main service.

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