Why are MVNO cheaper than their host providers?

There are cell phone service providers that have their own towers and there are those providers that use other carrier towers (called MVNO providers). If you noticed there are a lot of MVNO providers that charge cheaper prices for cell phone service than the provider that they are using. For example, Gizmo carrier have their own towers and another carrier Azmo uses Gizmo's towers to offer their customers cell phone service.

Gizmo charges $70/month for 600 minutes of calls, but Azmo offers unlimited calling for only $25/month. If you noticed this is what is happening with most of the MVNO providers today. The are selling their service for cheap while using the same towers that their host carriers uses.

How do they do it? Here is why.

The reason MVNO's are able to offer phone services at a low price is because they are operating on second tier bandwidth which means that they are second in line to subscribers that bought plans directly from a provider. This is why you may not have service in an area that gets AT&T service when on a resold AT&T band.

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