- MobileX, an MVNO that uses Verizon’s network, saw strong growth in April
- MobileX’s secret sauce involves the use of AI to offer customized cell phone plans
- But CEO Peter Adderton says independent MVNOs are increasingly going up against the bigger wireless carriers’ prepaid brands
MobileX enjoyed a strong showing in April, adding more than 30,000 new paid subscribers – so many, in fact, that it caused the company to run out of physical SIMs, the little chips that connect mobile phones to the network. Fortunately, the supply issue was quickly resolved and April’s subscriber growth ended up exceeding expectations.
But according to MobileX CEO Peter Adderton, the real challenge is keeping the momentum going in an increasingly difficult space, thanks in large part to consolidation, particularly in the prepaid space.
“It is a hard slog for an independent MVNO today because at the end of the day, we’re no longer competing against each other. We’re now competing against the retail brands who bought these MVNOs.”
Consolidation changes MVNO space
Indeed, considerable consolidation has swept through the MVNO space. Verizon acquired TracFone, an MVNO that used the mobile networks of Verizon, AT&T and T-Mobile, in 2020, and it’s now starting to see the fruits of that deal. More recently, T-Mobile in 2024 closed its acquisition of Mint Mobile, the Ka’ena Corporation MVNO that uses T-Mobile’s network. Both TracFone and Mint are considered “value” brands.
Now that Verizon and T-Mobile own these MVNOs, they’re pitting their sizable resources against smaller companies, making it harder for the independent MVNOs to compete against them, Adderton said.
“I get up every day and I'm not fighting the old MVNOs because they're all gone. I'm now basically fighting a Verizon or a T-Mobile or an AT&T branded company,” Adderton said.
Source of MobileX’s growth
Still, MobileX saw substantial growth in April, and Adderton credits one historically reliable source for much of that growth: consumers cashing in their spring tax refunds. The other big driver is newer: MobileX’s expanding range of independent retail dealers that are now selling MobileX services.
“The independent dealers can drive massive amounts of volume for you,” Adderton told Fierce.
Other factors play a role. MobileX’s secret sauce uses AI to calculate how much data a customer needs so they’re paying for the amount of data they actually use rather than shelling out a set fee every month for an “unlimited” amount of data, most of which goes unused for a lot of people.
More than 70% of MobileX’s customers are choosing to bypass unlimited plans and they’re saving big bucks – up to 80% by Adderton’s calculations – by letting MobileX’s AI calculate what they need.
MobileX’s 3-pronged strategy
Jeff Moore, principal of Wave7 Research, sees MobileX as having a three-pronged strategy in the U.S. prepaid market. The first is acting as a direct-to-consumer brand, similar to Mint Mobile or Red Pocket Mobile. The second is serving as a national retail brand; MobileX is sold at Walmart alongside other brands like Cricket Wireless, Boost Mobile and Walmart Family Mobile. Third is that push to drive distribution through prepaid dealers.
“I do think that MobileX has been able differentiate itself, focusing on AI to pay for data levels that correspond with actual levels of usage,” Moore told Fierce. “The lead pitch is of plans starting at $4.88/month. Many users are able to channel most of their usage via Wi-Fi, decreasing reliance on mobile networks.”
Speaking of Wi-Fi, it’s proven to be a clever and successful marketing strategy for cable companies, Adderton said.
“I think that's one of the reasons why the cable guys are doing pretty well,” he said. “Consumers don't know when they're on Wi-Fi and when they're on 5G, and that's the ultimate holy grail for them. They've got a pretty good strategy there.”
However, Comcast and Charter Communications offer mobile services to customers who also subscriber to their broadband plans, which makes them a slightly different breed of MVNOs. “They’re exclusively bundling, so their growth can only go toward people that are bundling broadband into the home,” Adderton commented.
Keeping up the momentum
All in all, MobileX is keeping its head above water. The company is privately held and declined to provide total subscriber numbers, but Adderton revealed that churn is less than 1%, which compares to churn in the neighborhood of 4% typical of the prepaid industry.
“We are extremely fortunate that we do have a very disruptive product and a very differentiated product, and people are buying that and are saving significant amounts of money,” he said.
Peter Adderton will be a featured speaker on the panel “Architecting the mobile network for an AI future” during the Fierce Network Research Virtual Summit: AI and the Network on June 3-4. Registration here is free. Join us!