Consumer Cellular: the MVNO with the longest time and market share in the U.S. market

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Consumer Cellular: the MVNO with the longest time and market share in the U.S. market

The mobile virtual network operator sector is a market that has been booming since the last few years with the advent of IoT and the 5G network. Many companies have entered the MVNO market in the U.S. and around the world, however not all have stuck with it.

In general, industry professionals agree that MVNOs must target a specific niche or offer a clear differentiator to be successful. In the case of Helio, led by entrepreneur Sky Dayton, it was partly about targeting South Koreans in the United States. Defense Mobile, focused on the military. 

But these mvno’s have disappeared or suspended their activities.

However, there is one MVNO that seems to stand out as a shining example of how to play the game and do it well – Consumer Cellular.

How is Consumer Cellular different from others? Well, for starters, they have been in the MVNO market for 21 years. In the following Guinea Mobile article, we explore this company’s success story as a Mobile Operator.

About Consumer Cellular

Consumer Cellular is a mobile virtual network operator (MVNO) that partners with two networks, AT&T and T-Mobile , to provide coverage. 

The company was founded in 1995 by John Marick and Greg Pryor and is currently one of the largest and oldest MVNOs in the US. 

It was purchased in October 2020 by investment firm GTCR for $2.3 billion.

The Mobile offering that differentiates Consumer Cellular from the competition.

For a mobile operator to scale favorably, it is necessary to identify a specific market niche and come up with a strategy that differentiates it from the competition.

The company found an underserved market niche. Its customer base is largely made up of people over 50 years of age. It is a segment in which, as a Mobile Virtual Network Operator, Consumer Cellular is the only competitor.

Another point that is important to emphasize and that greatly benefits the company is that by being a supplier of AARP (an interest group based in the United States that focuses on issues affecting people over fifty) since 2008, Consumer Cellular is able to offer exclusive discounts and benefits to those who are members of this group.

These benefits include a 5% discount on monthly rates and usage charges, a 30% discount on select accessories, plus an extended 45-day risk-free money-back guarantee.

Numbers that go beyond 

In 2019 Consumer Cellular reached 3.5 million users which places it among the top MVNOs with the largest share in the mobile sector.

These metrics would be impressive for almost any company in any industry, but they are especially impressive in the MVNO market, where the entire business model is based on buying wholesale wireless network access from the exact same companies it will be directly competing with (for Consumer Cellular that’s AT&T and T-Mobile).

Finding the 50+ market

So how has Consumer Cellular thrived for more than two decades in this competitive business? The company’s president attributes it to a strong focus on its chosen target demographic: people 50 and older.

Truth be told, however, it took Consumer Cellular quite a while to figure out exactly where the company’s niche was. The company initially launched with the goal of bringing service to the masses with cheaper service plans, but after 10 years, the company saw that it was not profitable.

It was in 2007 that the company made the decision to focus solely on people over 50 because that is where they were seeing the most traction. As it narrowed its focus on a niche market, the company worked to make its services as simple as possible to use.

As Consumer Cellular narrowed its focus on the 50+ market, the company worked to make its services as simple as possible to use.

Core Element

The main element of Consumer Cellular’s business strategy in focusing on its chosen niche is its customer service operation.

The company operates four call centers, and employs approximately 1,000 call center customer service representatives in order to ensure that there is no reason for a customer to want to leave their services.

Conclusion

Consumer Cellular faces several challenges. The company will have to keep pace with the pricing and promotions of the country’s largest operators, and it will have to go through technological evolutions such as the move to VoLTE. But in a market that is as competitive as wireless and in a segment as challenging as the MVNO space, it is worth recognizing a company that seems to have mastered the basics.

At Guinea Mobile we have been enabling brands with MVNO services, in collaboration with our host MNO Claro Peru. Contact us if you are interested and we will provide you with personalized advice.

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