Are the Days of the $10 Cell Phone Plan Numbered?

One of the best things about the mobile industry in the US is our plethora of super-cheap virtual operators. Companies like Tello, Ting, and US Mobile (all featured in our story on the best cheap cell phone plans) deliver talk-and-text plans for under $10, and data plans for not much more. They do that because our carriers want to soak up customers who wouldn't otherwise be able to afford mainstream plans. But low-price customers can be difficult to serve, with lots of turnover and associated costs. So instead of marketing directly to those customers, the carriers sell network capacity in bulk to smaller companies (MVNOs) that deal with the marketing and customer relationships.

Three deals are potentially upending this, the most recent one this week. The FCC just approved Verizon's purchase of Tracfone, by far the largest MVNO with 21 million subscribers, which also owns brands including Net10 and Total Wireless. Earlier this year, Dish bought Republic Wireless, a once-innovative MVNO focused on merging cellular and Wi-Fi, and has stripped away anything that made it interesting.

Even earlier than that, T-Mobile and Sprint merged, important because they were the two carriers offering the cheapest MVNO contracts. So far that has primarily had an effect on Boost, a former Sprint brand that was sold to Dish, and which Dish appears to be burning to the ground.

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The Verizon/TracFone approval has conditions of, basically, “don't mess up the market for three years.” The most important part is that Verizon must extend its other existing MVNO contracts for three years, but after that, of course, it's anybody's guess

The thing that most creeps me out about these agreements is that they're time bombs. The government freezes rates and deals for three, five, or seven years, making the merger look really good for consumers in the short term—but then there's the drop when that expires, and you're kicking air at the end of the hangman's rope.

In the MVNO world, Tracfone is relatively lazy and not particularly innovative. It relies on some very old network contracts and tremendous retail distribution. I periodically get emails about why Tracfone isn't one of our “best cheap cell phone plans,” and the upshot is always that the reader has heard of Tracfone, but hasn't heard of the less-expensive or more-innovative options.

But since Tracfone is so huge, Verizon absorbing it takes a lot of the air out of the MVNO market, making it a tighter, thinner place for the rest of the players. Fewer sellers of network and fewer buyers of capacity makes for a less nimble, less energetic market that's harder to enter and easier to leave.

This would all make sense if the idea is that MVNOs (and consumers) will have more choices in three years than they do now. But there's little sign of that. Pretty much all of that hope is pinned on Dish, a company that has betrayed promises to build a mobile network for the past ten years, and that is screwing up both Boost and Republic Wireless. It would be really nice if Dish comes through, but that feels like a dangerous bet.

Yes, this all seems gloom and doomy for something where the circuit breakers won't hit until three years from now. But I don't see where the exciting, disruptive new entrants are that will shake up the mobile market—I only see contraction. Cheer me up in the comments.

What Else Is Happening?

• Life360 bought Tile because Apple and Samsung are in the tracker business now. This is good! Tile's software has always been awful (I say as a Tile user) and Life360's is pretty great (I say as a former Life360 user).

• Qualcomm had an exclusivity deal for Windows on ARM, apparently. I'm not sure Mediatek joining the Windows-on-ARM party is going to fix Windows-on-ARM's problems, which I think are mostly around chips being underpowered and the Windows developer toolchain being a mess. There's just no perceived reason for devs to bother with this.

• The next Qualcomm Snapdragon will not be called the 898, it will be called something with a single digit. The problem I have here is that Qualcoom releases multiple chips in the same series in one year! So if it decides to have three 8-series chips in 2022, what will they be called?

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• T-Mobile is selling a branded Lite Brite for the holidays. This continues the carrier's steady drumbeat of silly branded gimmick products being released during the pandemic.

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