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Lightyear Wireless IS an MVNO

May 2, 2011

Lightyear Wireless IS an MVNO

Because there are a few websites that want to discredit LightYear or just don’t have their facts straight, I’m sharing this info to make it official, in case you read otherwise.  But before providing the proof that Lightyear Wireless is an MVNO, some readers may want to know what an MVNO is.  The definitions and a wireless industry primer are the second half of this post, below the proof.

THE PROOF
First I’ll give you the sites where Lightyear Wireless is listed as an MVNO, and then I’ll give you the logical reasoning.

Sites listing LightYear as an MVNO:

Industry references to LightYear’s MVNO status:

  • An industry consultant referred to LightYear being an MVNO – “Lightyear is a big Sprint Wholesale customer, but mainly wireline, although they are reselling Sprint MVNO service as Lightyear Wireless.“; “Sprint FMC Integration Service,” Sep. 13, 2010
  • LightYear was the first Verizon Wholesale Partner“Lightyear Network Solutions is First to Sign Up for New Services,” July 17, 2008
  • Verizon gets very specific about the differences between an MVNO Wholesaler vs. an Agent Reseller, 2010
  • Lightyear Wireless and Sprint have a long-term, well-established relationship that’s so solid, Sprint has a webpage titled, “Lightyear Case Study,” under “Sprint Wholesale Solutions”:  “… 14-year relationship partnering with Sprint Wholesale“; “LightYear Case Study,“ 2010
  • Gordon Simonson, Sprint National Account Manager for Wholesale, who has managed the LightYear account for 7 years, gave an incredible talk on Sprint’s relationship with LightYear, Apr. 8, 2011

The industry term “wholesaler” is synonymous with being an MVNO, while the term “reseller” generally indicates a company is not an MVNO and is merely a middleman.  (Unfortunately, some documentation refers to MVNOs as “resellers,” which confuses the issue.)

And finally, LightYear commissions paid to reps are listed under the category “Sprint MVNO Unlimited.”  A screenshot from back office commissions – see the last entry, far-right:

Sprint MVNO In LightYear Commission Statement

Sites that incorrectly state Lightyear Wireless is NOT an MVNO:

Some will say, “It says they are reselling Sprint MVNO service, but that doesn’t make them an MVNO,“; however, if you read the definition of an MVNO, which is clearly spelled out below, you’ll have to conclude that “reselling Sprint MVNO service” is really the same thing as being an MVNO.  That won’t be enough to satisfy some naysayers, but that’s plenty for me, along with all the other proof presented here.


OS Compared To Carriers
To help you understand the “wireless” (cell phone) industry, here’s a quick explanation of what’s what.  Besides fone manufacturers, there are software companies that create the “OS” (operating system), and then a “Carrier” is the company that provides the signal – the ability to communicate, either via voice (talk) or text or internet (data) – to the fone.  The fones and OS are usually manufactured by a company completely separate from the carriers; two examples are:

  • Apple makes the iPhone and the iOS that runs it, and uses AT&T (and now Verizon, also) for the signal (carrier)
  • HTC (homepage) makes many different fones that have the Google “Android” OS and use T-Mobile, Verizon, and Sprint as carriers.

Another way to look at the 3 different components of wireless fone service is to compare the similar parts of a desktop computer, where the companies and terms involved may be more familiar:  computer manufacturers, OS (operating system), and then “ISPs” (Internet Service Providers) that carry the “signal” to the computer.

Here’s a list of the world’s largest fone manufacturers.  (There are a lot of fone makers out there, so I’m not reproducing a list here.)

CARRIERS
Sometimes you’ll hear the words wireless providers, but the official industry term is “Mobile Network Operators” or MNOs.  You know the big 4 in America (listed in order of revenue):

1.  Verizon
2.  AT&T
3.  Sprint
4.  T-Mobile

There are several more (at least 6 or 7 – see “Top U.S. Wireless Carriers, 2010 Fourth Quarter“), and you may recognize a few of them, but these four are the only ones you need to know.  What’s fascinating is that T-Mobile’s owner, Deutsch Telecom (a German company), dwarfs the other 3 worldwide, even tho T-Mobile is small potatoes in America.  In fact, Verizon and AT&T aren’t even in the top 15 globally.  For some insights into the #1 Telecom monster in the world, check out this story.

LightYear is not a carrier.  They’re an MVNO, a “Mobile Virtual Network Operator.”  That’s another category of Mobile Network Operator, which, as far as the subscriber is concerned, seems identical to a regular mobile network operator.  The critical difference is that MVNOs do not own the underlying network of base stations, but instead lease (buy wholesale) network time from an MNO (one of the big 4 carriers listed above).

To make it official, here’s the explanation from Wikipedia, and then from Verizon.

Wikipedia:  “A mobile virtual network operator (MVNO) is a company that provides mobile phone services but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service.  Conversely, a company that does have frequency allocation(s) and all the required infrastructure to run an independent mobile network is known simply as a mobile network operator (MNO). MVNOs are roughly equivalent to the “switchless resellers” of the traditional landline telephone market.  An MNO that does not have a frequency spectrum allocation in a particular geographical region may operate as an MVNO in that region.”  (This description is nearly verbatim from a reference sourced on the Wikipedia site that sells the The MVNO Directory 2010 – 4th Edition.

Verizon:  “What is a Mobile Virtual Network Operator (MVNO)?  MVNOs execute a contract with Verizon Wireless to buy wireless service from Verizon Wireless to resell under their own brand to customers and perform all marketing, billing, collections and customer service for the customers they activate.  MVNOs establish and maintain the relationship with its customers.  MVNOs own the relationship with their customers and establish their own calling plans and pricing.”

LightYear isn’t just an MVNO – it’s a full-service telecom company, a “CLEC.”  Actually, being a CLEC is a bigger deal than being an MVNO and it’s harder to do!  The CLEC definition:  ”A Competitive Local Exchange Carrier, in the United States, is a telecommunications provider company (sometimes called a ‘carrier’) that competes with other, already established carriers (generally the incumbent local exchange carrier (ILEC)).” … “Local exchange carriers (LECs) are divided into incumbent (ILECs) and competitive (CLECs).  The ILECs are usually the original, monopoly LEC in a given area, and receive different regulatory treatment from the newer CLECs.”

OPERATING SYSTEMS (OS)
An OS is the internal software that makes a fone work.  There are fone manufacturers, such as Nokia, Motorola, RIM, Apple, HTC, Samsung, etc., just like there are computer manufacturers.  And then there are software developers, who make the OS internal stuff that runs a fone, just like there’s Microsoft making the software that runs a computer.  To further muddy the waters, many fone manufacturers also make their fone’s OS.

Here are the top OS companies (with percentage of worldwide operating system market share, based on 3Q, 2010, the latest data) – note the Android bullrush, from its debut at the end of 2008, to taking a quarter of the entire market less than two years later; also note the near-stagnation of the iPhone’s market share and decline of RIM (Blackberry):

Worldwide Smartphone Sales to End Users by Operating System in 3Q10 (Thousands of Units)

Company

3Q10

 Units

3Q10 Market Share (%)

3Q09

 Units

3Q09 Market Share (%)

Symbian

29,480.1

36.6

18,314.8

44.6

Android (Google)

20,500.0

25.5

1,424.5

3.5

iOS (Apple)

13,484.4

16.7

7,040.4

17.1

RIM (Research In Motion)

11,908.3

14.8

8,522.7

20.7

Microsoft Windows Mobile

2,247.9

2.8

3,259.9

7.9

Linux

1,697.1

2.1

1,918.5

4.7

Other OS

1,214.8

1.5

612.5

1.5

Total

80,532.6

100.0

41,093.3

100.0

Source: Gartner (November 2010)

Below, you can compare the first quarters of 2009 & 2010:
Worldwide Smartphone Sales to End Users by Operating System in 1Q10 (Thousands of Units)

Company

1Q10

 Units

1Q10 Market Share (%)

1Q09

 Units

1Q09 Market Share (%)

Symbian

24,069.8

44.3

17,825.3

48.8

RIM (Research In Motion)

10,552.6

19.4

7,533.6

20.6

iOS (Apple)

8,359.7

15.4

3,848.1

10.5

Android (Google)

5,214.7

9.6

575.3

1.6

Microsoft Windows Mobile

3,706.0

6.8

3,738.7

10.2

Linux

1,993.9

3.7

2,540.5

7.0

Other OSs

404.8

0.7

445.9

1.2

Total

54,301.4

100.0

36,507.4

100.0

Source: Gartner (May 2010)

For the update to the Android explosion, see this post, as LightYear rolls out their 100% latest-and-greatest Android lineup!

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