Carriers like simple mobile

[SField]

How can they afford to charge lower monthly rates?

 

[rocks]

Less overhead costs I presume since they are using someone else's network. This applies to walmart family mobile as well which uses Tmobile's network. Great deals indeed since there's no contracts involve...

 

[v0rtex]

Because they're "virtual carriers" (forget the technical term for it), they just lease access to equipment from the big networks that manage their own infrastructure (AT&T, Verizon, Sprint, etc) so their startup costs are low - they don't need to pay for the R&D or for future infrastructure expansion, just their bandwidth bill from the upstream telco.

Also, the margins are very high for cellphone services - there's a fair number of decimal places to go down from the standard $0.10 text message fee before you reach the actual cost of sending 140 bytes of data over a radio signal.

 

[rocks]

Yes that is correct, I think Walmart Family Mobile is the best because they offer a post paid, no contract plan with prepaid data, no credit check while the others like h20 wireless and simple mobile offer prepaid services.

 

[Pilot]

I have always heard that Sprint used other network's infrastructures and didn't have one of their own. true?

 

[forex]

Originally Posted by v0rtex

Because they're "virtual carriers" (forget the technical term for it), they just lease access to equipment from the big networks that manage their own infrastructure (AT&T, Verizon, Sprint, etc) so their startup costs are low - they don't need to pay for the R&D or for future infrastructure expansion, just their bandwidth bill from the upstream telco.

Also, the margins are very high for cellphone services - there's a fair number of decimal places to go down from the standard $0.10 text message fee before you reach the actual cost of sending 140 bytes of data over a radio signal.

Why would big telecoms lease their equipment and infrastructure to these virtual carriers? Are they under utilizing their assets and want to get higher return on them? They are creating competition for themsevles but I guess the earnings from leasing the infrastructure outweigh the lost business.

 

[Kyoung05]

Originally Posted by forex

Why would big telecoms lease their equipment and infrastructure to these virtual carriers? Are they under utilizing their assets and want to get higher return on them? They are creating competition for themsevles but I guess the earnings from leasing the infrastructure outweigh the lost business.

I believe FCC (?) regulations require them to.

 

[Jr Mouse]

Originally Posted by v0rtex

Because they're "virtual carriers" (forget the technical term for it), they just lease access to equipment from the big networks that manage their own infrastructure (AT&T, Verizon, Sprint, etc) so their startup costs are low - they don't need to pay for the R&D or for future infrastructure expansion, just their bandwidth bill from the upstream telco.

Also, the margins are very high for cellphone services - there's a fair number of decimal places to go down from the standard $0.10 text message fee before you reach the actual cost of sending 140 bytes of data over a radio signal.

This.

Plus it's important to know that the majority of these virtual carriers have been failures. It has not proven itself to be a good business model.