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February 27, 2020updated 28 Feb 2020 12:50pm

MVNOs 5G budget packages still lack value for price conscious US customers

By GlobalData Technology

5G is now available from mobile virtual network operators (MVNOs) – brands beyond the four biggest wireless network operators in the US. This doesn’t mean consumers are getting any service that is new or different from what AT&T, Verizon, T-Mobile or Sprint offer. However, they can get 5G access for a cheaper price.

These 5G services—which are advertised as delivering data speeds that are faster than what 4G offers—are coming from Metro by T-Mobile, which is T-Mobile’s prepaid brand, and also MVNOs that resell wireless service from T-Mobile and Sprint. These include Simple Mobile and StraightTalk, which both resell T-Mobile’s service, and Ting, which is offering 5G service via Sprint’s network.

Typically, MVNO pricing is cheaper than pricing from the country’s main wireless operators, but there are caveats. Data speeds typically are not as a fast as those offered by the major operators due to data throttling practices. Moreover, 5G smartphones are extremely expensive. Simple Mobile and StraightTalk, for instance, will sell the new Samsung Galaxy S20 for USD$1,000. Customers can also bring unlocked 5G phones to those networks.

MVNOs play a critical role in many markets around the world to encourage competition with cheaper pricing. However, at this early stage in the 5G game, though MVNOs may be offering 5G access at a cheaper price, the value for end users is lacking. This is because they must buy an extremely expensive smartphone and won’t see data speeds much faster than what is available on 4G. Users are attracted to MVNOs because they want to save money all around. They can purchase 4G smartphones for as low as USD$30 in some cases.

Later this year, many mid-range 5G smartphones are expected to come to market, which should make 5G services more attractive to more price-sensitive customers. Until then, the U.S. market will continue to see 5G as a premium service reserved for early adopters.

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