CNET'S QUICK GUIDE: MVNO carriers

The acronym "MVNO" stands for "Mobile Virtual Network Operator," a "virtual" cell phone carrier that does not provide its own network infrastructure. Instead, it leases the infrastructure from one of the big four carriers (Sprint, Verizon, AT&T, or T-Mobile). But that does not mean MVNOs aren't credible cell phone carriers. Rather, MVNOs offer their own handsets and pricing plans, plus they operate independently from the carrier they're leasing from. And more importantly, they often sell devices and services that aren't offered anywhere else.

MVNOs distinguish themselves from the traditional carriers by catering to a specific demographic with tailored services and phones. And in doing so, MVNOs strive to cultivate a unique image or "lifestyle," ranging from hip and trendy to user-friendly and affordable. For example, Boost Mobile and Helio are focused on teens and twenty-somethings in urban areas, while Disney Mobile and Kajeet focus on families and kids. Alternatively, other MVNOs such as Virgin Mobile emphasize their affordable prepaid plans. In either case, this niche marketing sets them apart from the major operators who reach out to a more general audience.

A little history
The MVNO phenomenon is still relatively new in the United States. In 2002, Virgin Mobile became the first MVNO to offer services here after it established operations in the United Kingdom and Australia. Its claim to fame was cheap discount phones with prepaid plans, which attracted mostly college students or younger customers on a budget. From then on, a slew of other MVNOs cropped up with Virgin's young and hip audience in mind, including Boost Mobile and Amp'd Mobile, which received some funding from MTV and Universal Music. Further niche MVNOs came along after that, such as ESPN Mobile for sports fans, and Disney Mobile for families.

Despite the surge in MVNOs as a group, they had yet to prove themselves as a viable option to consumers. For example, ESPN Mobile, Amp'd Mobile, and Disney Mobile were forced to shut down operations after disappointing sales (In December 2006, July 2007, and September 2007 respectively). But there is hope--Virgin Mobile has proven to be one of the more successful MVNOs with about 4.6 million subscribers by early 2007, while Helio managed to hit 70,000 subscribers within its first few months.