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Wireless 101 – A Primer

To help explain the “wireless” (cell phone) industry, here’s a quick explanation of what’s what, and then thorough details follow.  There are 3 major participants in every mobile fone:

  1. Fone manufacturers, such as Apple, Samsung, LG, HTC, Motorola, Research In Motion (RIM), Nokia;
  2. Software companies that create the operating system (“OS“), such as Apple’s “iOS” for the iPhone, Google’s “Android” for many different fone makers, Microsoft’s “Windows Mobile,” and RIM’s “Blackberry.”
  3. And “Carriers” or wireless companies that provides the signal – the ability to communicate, either via voice (talk) or text or internet (data) – to the fone, such as Verizon, AT&T, Sprint, T-Mobile (the “big 4”), and smaller companies US Cellular, Cellular South, MetroPCS, and Leap Wireless (Cricket), and then wholesalers like Tracfone and Lightyear Wireless.

You may have noticed from those 3 categories above that sometimes the fone and OS are manufactured by the same company, such as Apple & RIM, but the fone manufacturers and software companies are completely separate from the carriers; in other words, none of the carriers make fones or operating systems.

Two examples of the relationship between all 3 participants:

  • Apple makes both the iPhone and the iOS software that runs it, and AT&T (and now Verizon, also) provides the signal (carrier).
  • Samsung makes many different fones that have the Google “Android” OS and uses Verizon, Sprint, AT&T, and T-Mobile 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:

  • Dell makes the computer that has the Microsoft Windows OS and then the consumer chooses an Internet Service Provider such as Cox cable, Comcast cable, or Verizon FIOS that carries the internet “signal” to the computer.
Computers = Mobile Fones
Computer Manufacturers = Fone Manufacturers
OS (Operating System) = OS (Operating System)
“ISPs” (Internet Service Providers) = Wireless Carriers

You may notice that consumers currently make their computer purchase independent of their carrier (ISP) choice, whereas with wireless the consumers’ fone choices are directly tied to the carriers; in other words, most fones are not available with all wireless providers, so the carrier you choose directly affects what fones you’ll be able to choose (and vice versa).  We expect that to change in the near future, to model the way we choose computers and ISPs.

Here’s a list of the world’s largest fone manufacturers for Q1 2011 (and a list from 2010).  There are a lot of fone makers out there, so I’m not reproducing a list here.

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, which was the latest data when I wrote this) – 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)




3Q10 Market Share (%)



3Q09 Market Share (%)






Android (Google)





iOS (Apple)





RIM (Research In Motion)





Microsoft Windows Mobile










Other OS










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)




1Q10 Market Share (%)



1Q09 Market Share (%)






RIM (Research In Motion)





iOS (Apple)





Android (Google)





Microsoft Windows Mobile










Other OSs










Source: Gartner (May 2010)

It will be fascinating to compare 2009 & 2010 to 2011 and 2012.  For an April 2011 update to the Android explosion, see this post, as Lightyear Wireless (a wholesale carrier) prepared to roll out its 100% latest-and-greatest Android lineup!

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.  Here’s the list of top 20 largest wireless carriers globally by revenue for Q4 2010 (Verizon is #3, AT&T #4, Sprint #10).  In terms of number of subscribers, 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.)

The type of service carriers offer can vary, too.  There are two different modes of signal dissemination:  CDMA and GSM.

  • CDMA = Verizon, Sprint
  • GSM = AT&T, T-Mobile

For our brief overview purposes here, the two main differences between the two are:

  1. GSM has a “SIM card” and CDMA does not;
  2. While CDMA is more popular in America, GSM is the older mode that most of the world uses, so it’s better for international travel.  (I tell Lightyear Wireless customers to rent a fone if they leave the USA, which still saves them plenty of money using a Lightyear CDMA fone.)

I won’t get into a detailed explanation of those two types, but you can click the links and study all day if you want to.  There’s a great Gizmodo article from Sep. 2010 that thoroughly covers the important variations between the two.  Here’s a helpful chunk of it:

“Back in 1995, CDMA was an insurgent standard trying to supplant the dominant GSM, and the differences between the two technologies were more obvious.  Old-school, 2G GSM phones worked better inside of buildings (neat trick: If you’re having trouble getting a signal indoors, switch off your 3G), but caused interference in unshielded speakers (side-effect of aforementioned ‘neat’ trick).  At the same time, CDMA phones had a slightly more refined method for handing off calls from tower to tower, so they dropped fewer calls.  This is still true.  It’s also still true that 2G GSM networks can offer better coverage in mountainous terrain, since they utilize taller cell towers, though range of said towers is otherwise a bit shorter.  Additionally, GSM (and UMTS) phones can send and receive data packets while making a call, which most CDMA networks still don’t support.

“Such were the arguments for and against CDMA when it barged into the scene in 1995, at time when GSM was the only game in town and most people didn’t even own cellphones.  So it follows that these original performance differences, which were striking at the time, now don’t matter matter quite so much anymore.  If a Droid gets better reception at your house than an iPhone, it’s not because one is a CDMA2000 phone and the other is a GSM/UMTS phone.  It’s most likely because Verizon has a tower closer to your pad, and the backhaul to support your calls.”

Some say that CDMA reception is much better inside buildings and better at handling transfers between cell towers (resulting in fewer dropped calls).  Customer satisfaction surveys consistently reflect this, as Verizon and Sprint (both CDMA) top the surveys, while AT&T and T-Mobile (both GSM) lag behind (proof:  here, here, and here).  Having said that, this whole argument is moot very soon, as both of those standards will be abandoned for the future LTE (4G) standards.  “What’s 4G,” you may ask?  We’ll hit that now.

You’ve probably heard the term “3G” or “4G” network, which can be confusing.  The higher the G number, the faster and more advanced the delivery speed.  Here’s a short description (and the college course is here):

  • 0G = Zero generation mobile radio telephone; preceded modern cellular tech (included “Push to Talk”).
  • 1G = 1st-gen. wireless telephone tech; analog telecom standards introduced in the 1980s.
  • 2G = phone conversations digitally encrypted; significantly more efficient on the spectrum, allowing far greater mobile phone penetration levels; introduced data services for mobile, starting with SMS text messages.
  • 3G = standards fulfilling the IMT-2000 specifications for wide-area wireless voice telephone, mobile Internet access, video calls and mobile TV, all in a mobile environment at peak data rates of at least 200 Kbps; latest UMTS release, HSPA+, can provide peak data rates up to 56 Mbps downlink in theory (28 Mbit/s in existing services); CDMA2000 latest release EVDO Rev B offers peak rates of 14.7 Mbps downlink.
  • 4G = In 2008, ITU-R specified peak speed requirements at 100 Mbps for high mobility communication (i.e., from trains and cars) and 1 Gbps for low mobility communication (i.e., pedestrians and stationary users); provide a comprehensive and secure all-IP based mobile broadband solution to laptop computer wireless modems, smartphones, and other mobile devices.

The big controversy today is over claims of 4G that don’t meet the requirements for 4G.  For more about that, see the last section of “Flawed Thinking Runs Rampant In The Wireless World.”

LightYear is not a carrier.  They’re a wholesaler, an MVNO, “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.”

For more info on Lightyear Wireless’ status as an MVNO, see Lightyear Wireless IS An MVNO.

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