The downsides to using an alternative carrier

The company that provides your cellular service has a single goal in mind — to make money. Achieving that goal in 2017 means offering features you want at a price you are willing to pay, and guaranteeing a certain quality level to that service. Some of us pay more for that guarantee, or more for an increased capacity to enjoy wireless service, but for the most part the US cellular market is fairly static. Those of us paying close attention to relatively small changes in service get excited by the theater of competitive marketing, but overall the "big four" have been mostly the same for years.

This is why there are frequently pockets of excitement surrounding "alternative" carriers. Sometimes we call them pre-paid providers, sometimes we call them MVNOs, but they're all basically the same thing. These alternatives are exercises in securing users willing to sacrifice features for a lower monthly rate, but in recent years the marketing around these companies has become so good it's often difficult to see what features you are losing.

How these 'alternatives' work

Pre-paid

When land line telephones were in their infancy, service providers would sell more lines than they could support in an area. It was highly unlikely that everyone would pick up the phone at the same time to make a call, so there was always part of the network left unused. In selling a fraction of those unused lines, the phone company could make more money without expanding service.

Just like everything else, read the fine print first.

A similar technique is used in the cellular world today. Many people pay the "big four" for more than they actually use, either as a way of ensuring there's never a surprise overage fee at the end of the month or because a lower alternative isn't available. This means there's a portion of the network almost never being used, even when selling over the theoretical capacity. This leftover network is sold as a bulk service to a Mobile Virtual Network Operator (MVNO for short) which turns around and sells this service just a hair above the cost of the bulk rate offered by the carrier.

The benefit to users is clear. It's a noticeably cheaper cellular service that can claim to be "just as good" most of the time, and for people on strict budgets or those who view cellular service as a luxury it's a good way to save money. This smaller company makes a reasonable profit from reselling leftover network, and the host company makes a reasonable profit with almost no additional work on its end. Everyone wins, at least in theory.

What you sacrifice for that lower rate

Verizon Wireless

There's gotta be a catch, right? There's always a catch. With MVNOs, the catch is all in the quality of service. That can mean a couple of different things, and each of them are important to consider when choosing whether it's actually worth it to spend less.

For starters, the service you get from an MVNO is never "just as good" as the host service. The alternative option will almost always be slightly slower when using the 4G LTE, and in many cases the performance difference is more than just a 1-2mbps difference. The host carrier will always prioritize the service of their regular customers over the other users on the network, because they're paying for the privilege.

The prioritization also happens when the network is completely saturated, which doesn't happen terribly often in most places. Your cellular network is usually only fully loaded when a tremendous amount of people in a single unplanned place start using their phone all at once. For example, if a natural disaster occurs and suddenly everyone is making calls and broadcasting video streams all at once, the host network is designed to ensure its primary customers have service no matter what. The same can not be said of your average MVNO. In fact, most of these budget service providers include this clause in the Terms of Service:

WE MAY LIMIT, THROTTLE, SUSPEND OR TERMINATE YOUR SERVICE OR AGREEMENT WITHOUT NOTICE AT ANY TIME AND FOR ANY REASON

For anyone using cell service as their one and only phone line, that kind of planned instability invites catastrophe. But the specter of what might happen isn't as concerning as not being able to hold the company responsible for failing to deliver the service promised in the advertising. If you call Verizon Wireless after an outage, you can ask for a credit for the time you were not able to use your service. If you call an MVNO and ask for the same, you will frequently be reminded of the section of Terms and Conditions that reads:

You agree we are not liable for problems relating to Service availability or quality.

Which brings us to the final problem with 'alternative' carriers — good old fashioned customer service. The whole point of an MVNO is to be able to offer you discounted service because the operating costs are much lower, and that includes customer service. The "big four" are available to you 24/7/365, usually through phone and email and even text chat on each of the websites. In some cases, you can even get support through Twitter and Facebook. You won't find the same level of support through an alternative carrier, because it's expensive to offer that level of support all the time.

Budget carriers can be expensive in other ways

Mint SIM

As long as you know what you're getting into when you sign up for service, there's nothing wrong with saving money by going with a cheaper service provider. There are plenty of perfectly valid reasons to need or want to save money on your phone bill, and many of these alternative carriers offer that ability to save as the primary feature.

Just like everything else, read the fine print first. You always give up something when switching from a company that manages its own network to a company that resells a product as its own, and in most cases the cheaper you go the more you give up. If you're using that service as your only way to communicate with the rest of the world, giving up the guarantee that you'll even have service when you need it can be a real hassle.

Russell is a Contributing Editor at Android Central. He's a former server admin who has been using Android since the HTC G1, and quite literally wrote the book on Android tablets. You can usually find him chasing the next tech trend, much to the pain of his wallet. Find him on Facebook and Twitter

26 Comments
  • Well this article belies the one on Mint, which states that you'll be getting the same service as T-Mobile customers, with "none of the downsides" (that may not be verbatim, but close enough). Pokegate: 07/14/16 - Never Forget...
  • It sure does.
  • I'm glad you wrote this because the other article basically said you'd get the same exact results using a mvno for cheaper. I thought that article was misleading because, as you pointed out, you don't get the same exact service. Maybe you should merge the articles?
  • And as someone who deals with customers who use these MVNOs every day I can assure you that Russell is absolutely right. The service may seem the same but it never is. There is ALWAYS a catch or compromise.
  • AC is offering alternate points of view. It comes down to your mileage may vary. My wife's been on straight talk for years (AT&T sim) with no problems. $45 per month for 5GB of LTE then it slows down. she uses no more than 3 GB in any month so it works for her. My brother has been on sprint for years, he loves it gets great service where he lives and works and is on one of their "unlimited plans". I and my son are on a AT&T 10GB family plan. Again works great for me (i pay the bill) and I have had zero issues. My son uses 8gb on average per month I use maybe 1!
  • Very true. I have my wife on cricket with the$35 plan that now gets her 3gb data. No issues. I just don't want to change my plan on T-Mobile which is a single line plan only and after tax and work discount it's exactly $44.29 every month for unlimited data.
  • Do you know if your wife's cricket plan has a data cap? I think Verizon and AT&T mvno's keeps the data speed under 10mbps
  • Yes, it's at 8mbps but almost every time we check the speeds it's usually around 11mbps. So it's definitely doable.
  • Yep and on my verizon HTC 10 I only get 5 with cricket which actually is not bad. Going from 38 to 5 is a difference, but only in downloads or updating apps.
  • I would agree and since Jerry responded to my comment which had to do with the complete lack of any response from Mint SIM (36 hours later I still haven't had any either), along with another important fact; it's not unusual for a new MVNO to go under. As a result if you pay for a year in advance to get the lowest rate you're hung out to dry if the carrier fails. I'm not a phone monster like many which is why saving money when it's not used often is important. The real question is whether the effort of changing the APN, potential poor quality and complete lack of customer service is worth the savings. The jury's out right now
  • Does Sprint count as an "Alternative Carrier " ?
  • Hahahaha! It might as well be considered one IMO.
  • While these points CAN be valid, I don't think it's fair to say that they ALWAYS are. Sure, your network speed may be throttled faster on any MVNO. That's kind of a given. However, when it comes to customer service, the support I've received from Fi has been a huge step up from the terrible support I received from any of the "Big Four" (and I've tried them all, at one time or another). Also, there can be unexpected advantages. For example, on Fi, you can hop to any of four networks (T-Mobile, Sprint, US Cellular, and Three), giving you a much larger coverage area than any one of them. That last, Three, is especially noteworthy, because it allows U.S. travelers a way to roam internationally without breaking the bank or the need to use burners. The point here, that the article missed, is that MVNOs will always have some disadvantages, but can sometimes make up for that with other advantages. As the article said though, as long as you read the fine print and know what you're getting into, an MVNO may turn out to be the correct carrier for you.
  • Yup, I'm on Project Fi and joined the Android Beta program yesterday. My WiFi at work is spotty and when I went to download Beta Android 7.1.2 the WiFi shut off and my data was used for the download. I went to customer support, and sent them an e-mail. They responded in minutes and gave me a $10 credit. That type of convenience and service has NEVER happened in all my years with Sprint (7) and with T-mobile (3). I'm very satisfied with Project Fi's Customer Service!
  • Entitled much? How is it it Google's fault your wifi cut out?
  • Nice counterpoint article.
  • I've been on Tracfone for many years, usually on the Verizon network, sometimes on AT&T. 99% of the time, I have no problem with calls or data. The cost for my family is great. Minutes roll over from month to month, and typically cost me around $25 per phone every three to four months. If I have lots of minutes and only need to keep my service active, it only costs about $7 per month. The only problem I have ever had is when we take the Disney trip to California. Then there are so many people all on their phones that I can't get a reliable data connection and I have seen 1G connection speeds. Tracfone customer service is spotty to crap, but luckily don't need to use them for very much. For my family this has been great, as spending over a hundred a month for four phones would not be doable.
  • I feel like there is a little fear mongering here about disasters etc. Never been on the big 4. After going through a major tornado, i didn't have any trouble placing calls. I think I was on Air Voice (att towers) at the time. I had friends using my phone because it worked. Others had lots of problems especially those on Verizon which lost a tower in the storm. SMS Texting is usually the best to get through in emergency situations like that anyway as it doesn't get as congested. Text if you can.
  • It's not fear mongering. It's cutting through the BS Marketing of these MVNOs and telling you the downside. It may not effect you at all, or you may not care. But the marketing that says they are the same are a flat out LIE.
  • Can someone discuss the differences in roaming arrangements?
  • One feature to consider is WiFi calling. As our home and my office do not get good cell coverage (Sprint, Verizon, T-Mob, AT&T, it doesn't matter) we need this feature. Looked into alternative carriers but discovered WiFi calling is a Carrier feature and was not offered by MVNO's. Some devices like the unlocked Mate 9 I almost ordered don't even include this feature (whereas iPhones have it built in). Ended up staying with Sprint when we turned in our old phones and replaced them with mint condition devices (+11 months remaining warranty) from Swappa after confirming WiFi calling feature. Sprint Note 4 upgraded to a Sprint LG V20 and the Wife's Sprint iPhone 6 replaced with an unlocked iPhone 7 (Qualcomm Modem). Analyzing our usage over the past 2 years allowed us to downgrade to a plan that covers our needs and save money while still having WiFi calling.
  • Fi includes wifi calling. So far very happy with the service quality and the customer service.
  • After reading the MintSim article I did a little checking on their site and found they do offer wifi calling and text on phone that are capable. Here's the link to the specific page: https://www.androidcentral.com/e?link=https2F2...
  • I've always been skeptical of those same exact service claims from alternative carriers. We attend a lot of sporting events, and my grandad's various prepaids never work. Granted, I've had issues with Verizon and Sprint close to game time when the stadium or venue reaches capacity.
  • I think what this article amounts to: Some big name advertisers didn't like the first article that said MVNO service is the same.
    So now we have this article !
  • I've saved money, get quick service, and have good coverage with Fi. We are mostly on wifi so we use very little data. Most months my wife and I pay only $45 a month. Last month we only paid $25 because of a referral...If anyone wants to save 20 bucks and join use this code to sign up 3M709P