August 15, 2016
T-Mobile led the charge on mobile-phone carriers by diverging from the standard two-year contract model. Consumers got tired of paying exorbitant fees to, essentially, rent mobile devices, even past the point of having paid for them in full. Eventually, Verizon, Sprint and AT&T followed suit, adopting similar models to stay competitive. But consumers are doing something that could further disrupt the industry. They’re looking to lesser known prepaid carriers to gain a higher level of flexibility and a low-budget option.
What’s more, consumers want to take their favorite devices with them.
The various prepaid carriers like Ting, Ring Plus, Republic Wireless, Freedom Pop and others are called Mobile Virtual Network Operators (MVNOs) and they purchase their minutes and data from the major carriers in order to offer consumers similar quality service without the commitment. For these plans, the service cost is comparatively low, sometimes just a fraction of the cost of the larger providers. And if you bring an unlocked device to one of these carriers, the cost is even less.
Demand for Pre-Owned Devices
In a phone interview with Jon Rush, the General Manager of C7 Device Recycle, Rush said that there’s an increasing call for consumers to do just that.
“There is a huge demand for pre-owned devices to be used with low-cost prepaid services such as Ting, Ring Plus, Straight Talk and many others,” says Rush. “Straight Talk, for example, gives you a choice between Verizon and AT&T and their ‘bring your own device’ program accepts a large variety of phones that were active on previous carriers.”
To respond to the demand, C7 Device Recycle, which refurbishes and uses old cell phones, is developing a prepaid compatible section for their store. “For instance, if someone wants to activate service for Ring Plus, they can go to that section in our store and see all of the devices we have that are compatible with that service,” says Rush.
MVNO Market to Hit $75.5 Billion
Based on consumer demand for no-contract options, a recent market report projects the MVNO market will exceed $75.5 billion by 2023. The increase in MVNO popularity will no doubt correspond to higher demand for unlocked devices that can be used on the carriers.
Consumers have taken control of their mobile destinies, and they’re demanding greater flexibility while refusing to sacrifice service and device quality. The heavyweights of the mobile industry are going to have to listen and respond to the evolution of the space in order to stay competitive.
For an ironic spin on an iconic Verizon commercial, it’s now the consumers who are asking the carriers: “Can you hear me now?”
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