T-Mobile US(s tmus) credits its new Un-carrier strategy of quick upgrades, cheap plans and free tablet data to its recent stellar subscriber growth, but there’s an unsung hero in T-Mobile numbers. Mobile network virtual operators — essentially infrastructure-less carriers who buy time on T-Mobile’s networks – accounted for 344,000 of T-Mobile’s 1 million net subscriber additions in the third quarter.
Until recently Sprints(s s) was the largest champion for the MVNO in the U.S. – any new startup with an innovative or crazy business model signed up to buy its 2G voice and 3G/4G data services. Some of the most famous MVNOs in the U.S., from FreedomPop and Karma to Republic Wireless and Ting, call Sprint’s network home.
But recently a lot of new MVNOs have signed on with T-Mobile, taking advantage not only of its faster HSPA+ service, but the fact that customers could bring their own devices to the T-Mobile’s SIM-card supported GSM networks. Solavei; Target’s(s tgt) Brightspot; Walmart(s wmt) Family Mobile, and TracFone Wireless’s(s amx) Straight Talk, Telcel América, Net10 and Simple Mobile all use T-Mobile networks either in part or exclusively.
The result is 1.3 million new MVNO connections have found their way onto T-Mobile’s network in the last year, and its overall quarterly net additions from MVNOs have increased by 189 percent year-over-year, T-Mobile CEO John Legere said on T-Mobile’s Q3 earnings call. T-Mobile now has 5.2 million MVNO connections, which isn’t huge compared to its nationwide competitors, but for a carrier the size of T-Mobile that’s a significant chunk of subscribers.
MVNOs, of course, don’t bring in the $50-plus monthly subscriptions of prepaid or postpaid connection, but they’re a source of easy wholesale revenue and a way for T-Mobile to make use of spare HSPA+ and GSM capacity as its subscribers move onto is new LTE networks. It’s also proven to be a better wholesale business for the operator than internet-of-things connectivity. T-Mobile only added 7,000 net new machine-to-machine connections in the third quarter, and its M2M subscriptions now total only 3.4 million.
T-Mobile is also looking to grow by targeting the budget of the end of the subscriber spectrum. After it merged with MetroPCS this spring, it decided to keep the Metro prepaid brand going and has been expanding its service outside of Metro’s traditional territory. On Tuesday it announced it would begin selling MetroPCS service on Nov. 21 in 15 new markets, including Denver; Phoenix; Portland, Ore.; and Cincinnati and Columbus, Ohio.