Most prepaid phone service providers in the United States are Mobile Virtual Network Operators, or MVNOs. You'll hear this term often when you start researching inexpensive phone plans. But what does this mean for customers?
Two types of wireless carriers
There are two major types of wireless carriers: companies that run their own network and companies that don't. In the United States, the major carriers that run their own networks include Verizon, AT&T, T-Mobile, and Sprint. There are many local or regional carriers that run their own networks as well. These companies offer service to customers on the networks they run. When a customer connects to a tower they do not run, that customer is roaming "off network". Most of these operators offer both post-paid and pre-paid services.
Companies that don't run their own network are called Mobile Virtual Network Operators. Instead of running their own network infrastructure, they rent from the main carriers. For example, Page Plus has an agreement with Verizon that allows Page Plus to sell wireless service under their own name. In return, Page Plus pays Verizon for using Verizon's network. Most of the companies listed on this site have such agreements with one or more of the big four carriers.
What an MVNO means for customers
In general, customers can buy prepaid wireless service from an MVNO just like they would from a carrier that runs its own network. You might not even realize that your carrier doesn't run its own towers and infrastructure. However, it does matter which network your phone service runs on.
The four major networks vary significantly in their coverage, and an MVNO usually only has access to the 'native' network. If they offer roaming, it is generally at a higher cost. Some MVNOs don't offer roaming at all. A post-paid plan from a major carrier often has roaming included at no added cost so that the carrier can offer a wider coverage area. Prepaid services generally do not include this roaming (although there are exceptions). This means that MVNOs offering service on the smaller nationwide networks (T-Mobile, Sprint) offer smaller coverage areas - sometimes significantly smaller. However, they are often cheaper than services offered on the larger networks (Verizon, AT&T).
Thus it can be helpful to know which network an MVNO runs on. For example, if you know you have good AT&T coverage in your area, but Sprint coverage is not good, then you need to find a carrier that runs on the AT&T network and avoid carriers on the Sprint network. The PhonePlanChoices wireless plan comparison tool can help you single out plans from MVNOs on a particular major network. Some MVNOs offer plans on multiple networks. And always check coverage maps before buying. MVNOs on the same major network sometimes have different roaming agreements.
There are two major technologies used on cell phone services in North America: CDMA and GSM. (LTE is a newer, faster technology used in conjunction with both CDMA and GSM.) GSM utilizes SIM cards to identify a device to the network. CDMA phones have unique serial numbers that do the same. CDMA and GSM are not compatible with each other. While some phones have both GSM and CDMA radios installed, many have either one or the other. Sometimes the same phone is sold in two different versions, each with different technology.
If you have a phone you want to use with an MVNO, it is important to know which technology the phone uses. AT&T and T-Mobile use GSM technology; Verzion and Sprint use CDMA. Prepaid MVNOs sometimes have rules on what phones can can be used with their services, but the phone must always be compatible with the underlying network. Thus a Verizon CDMA phone cannot be used on a MVNO that runs on the AT&T (GSM) network. (Some MVNOs offer service on multiple networks.) Always check that your phone is allowed on the carrier's network. The PhonePlanChoices's carrier profiles generally indicate what sort of phones are permitted on a given carrier.
MVNO plans are generally less expensive than plans offered by the big carriers on the same network. And MVNOs on the smaller networks are generally the least expensive of all. These plans are good for people who live in the coverage area of the smaller networks, generally in cities and urban areas - why pay more for coverage you don't use?