Apple has officially stated this morning that they have not discussed any plans with to create its own wireless network, referred in the industry as a Mobile Virtual Network Operator, or MVNO.
It’s easy to understand why many think Apple wants to create an MVNO. Steve Jobs admitted he explored the idea during the original iPhone’s creation. Much of iPhone’s unique activation process (provisioned through iTunes, rather than an AT&T store’s computer) was centered around keeping the door open to such an idea.
Direct rival Google is very much in this field, with not one but three separate projects. Project Fi is Google’s direct MVNO with T-Mobile and Sprint. It builds atop Google Voice which allows Google to leverage VoIP service across all carriers, and even the Internet itself. And Google also is a major investor in Republic Wireless, which many consider to be a precursor for Google to Project Fi.
Republic is still alive and well, switching to a refund model that competes head-on with Project Fi itself. And, unlike Fi, has no waiting list – albeit limited to Sprint-and-WiFi only coverage.
Still, it remains clear why Apple doesn’t want to make an MVNO; it’s making so much money off the current carrier system. Carriers are happy to tout the iPhone as a success story. Apple is loyal to its shareholders, not to consumers first, and while an Apple carrier might save customers money… it might not, either. MVNOs have been pushed away from unlimited, unthrottled plans, and typically only offer a small amount of data before being capped or throttled.
Project Fi for example could cost customers hundreds of dollars per month more, depending on how much data that they use, versus carrying two separate T-Mobile and Sprint unlimited-data plans. And with T-Mobile now offering free international roaming in Canada and Mexico – for both voice and 4G LTE data, the pathways for Apple and Google to profit from tech-savvy customers is narrowing. Carriers don’t want an Apple or Google MVNO to beat their own offerings. As long as they own their networks, that is unlikely to happen either.