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In the USA, MVNOs are forced to offer far lower speeds than their hosts

In the USA, the importance of MVNO services to the mobile services landscape has been boosted significantly by the launches of wireless and multiplay offerings by the major cablecos, notably Comcast and Charter.

These are not traditional cut-price MVNOs, destined to address a niche market or be snapped up by larger players. Their use of Verizon’s network to support cellular services for their user base is highly strategic, complementing deployments in WiFi and, in future, 5G to provide a serious competitive alternative in the mobile space.

It is concerning, then, to read that the average speeds for MVNO customers can be far slower than for subscribers to the host network. A new report from network testing firm Tutela found that the average download speeds provided by MVNOs such as Comcast Xfinity Mobile or Consumer Cellular are 23% slower than those on the host networks of Verizon or AT&T.

This highlights the challenge for MVNOs – lack of control over their own quality of service, since the host is responsible for optimization, and can reserve the most advanced services and network functionality for their own customers. This explains the eagerness of major cablecos to buy their own spectrum again, and to test 4G and 5G in unlicensed bands such as the general access portion of the 3.5 GHz CBRS.

Some companies are opting for ‘heavy MVNO’ deals, in which they build out some of their own base stations (often small cell networks to support strategic locations or customers); or provide the host operator with assets, such as sites and backhaul, in return for enhanced access to the RAN. Altice’s agreements with Sprint fall into this category, reflecting a more even-handed and strategic relationship than the traditional MVNO contract.

“Our tests show that Comcast’s Xfinity, which operates on Verizon’s network, provides roughly half the average data speeds in urban areas where Tutela conducted tests—12.6Mbps in comparison to 24Mbps,” the report states. “The consistent quality score showed a 33.8 point disparity in Verizon’s favor.”

The faster download speeds do not always translate to happier customers for the telcos.  For example, AT&T’s MVNOs offer speeds that are about half of what AT&T itself provides, according to Tutela, which wrote:. “Consumer Cellular, Cricket and H2O all have download speeds that are around half what AT&T offers in the urban locations where Tutela tested both.”

However, H2O and Consumer Cellular “both managed to achieve significantly higher consistent quality scores than AT&T – 72.8% and 71.5% respectively, compared to around 67% from AT&T”.

This shows the importance, for a high value MVNO, of investing in their own core, and ensuring it is modern and high performance. Tutela continued: “While we can’t draw any absolute conclusions, one possible reason for this is superior core network elements (e.g. gateways and routers) on the part of those two MVNOs. Cricket, meanwhile, came in far lower with 40.8% compared to AT&T’s 65.7%.”

For some host operators, the discrepancy in speeds is far less apparent. “In our tests, Tutela found that the MVNO download performances of Consumer Cellular, LycaMobile, MetroPCS and Ultra Mobile were remarkably similar to those of T-Mobile,” the firm noted.

“However, MetroPCS’ website states that its customers’ data is ‘prioritized below data of some T-Mobile-branded customers at times and locations where competing network demands occur’.” That means that, at busier times, MetroPCS customers are likely to lag behind T-Mobile users in terms of their experience.

This example indicates the delicate balance that operators strike when they have ‘internal MVNOs’ – secondary brands, often for the low end market, which they own themselves. These can be used to address a lower budget sector without compromising the core brand (TMO gained the MetroPCS brand when it acquired the prepaid-only provider. Some operators set up internal MVNOs from scratch, as O2 UK did with giffgaff). However, these operators also risk cannibalizing the main customer base if the offers are too attractive.

Other operator-owned MVNOs in the USA include AT&T’s Cricket and Sprint’s Boost Mobile and Virgin Mobile.

Tutela also provided rankings for four MNOs in terms of consistent service quality, finding that Verizon was the strongest. In 78.1% of tests in urban areas, the operator met or exceeded the tester’s network performance standards.

Tutela gets its measurement results via software installed on more than 3,000 partner apps across 250m Android and iPhone devices globally, collecting over 10bn mobile data measurements every day. The firm’s most recent data was collected from January 1 to August 31 2018, and includes information from 240bn measurements, including 5.9m download tests.

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