By: Liz Parry

The United States leads the world in average revenue per user (ARPU), a metric often used as a shorthand for telecom market maturity. However, this apparent success masks a critical weakness. The U.S. mobile virtual network operator (MVNO) sector remains a fragmented, underpowered collection of legacy systems and outdated business models. In contrast to Europe, where MVNOs have evolved into agile, platform-driven operations, the American market is showing its age.

Trump-era policies and the exposure of systemic weaknesses

This is not merely a matter of industry inertia. The structural limitations in the U.S. MVNO market are a direct result of years of dependency on subsidy programs, such as Lifeline, which helped make service accessible but created a false sense of sustainability. Many MVNOs were built to optimise for short-term funding flows rather than long-term resilience. With the phaseout of Lifeline and other public support, the sector now finds itself in uncharted territory, exposed to market forces without the operational maturity to adapt effectively.

Compounding this vulnerability is a regulatory and technical environment that is unusually complex. Dual-network strategies, often pursued to maximise coverage, have resulted in tangled integration challenges and bloated operational overhead. Adding to this are the complications of state-by-state tax compliance and inconsistent regulatory interpretations.

These structural flaws were largely invisible during the years when subsidies kept revenues predictable and margins stable. But recent shifts in U.S. telecom policy, particularly those initiated during the Trump administration, have brought the issue into sharp relief. While the focus of those policies was largely on reviving domestic manufacturing and reshoring production, their indirect impact on telecom was significant. By cutting off public support mechanisms without addressing the broader operational deficiencies of MVNOs, these changes forced many to confront uncomfortable truths about their viability.

A significant number of U.S. MVNOs have therefore found themselves in the market without the necessary infrastructure, resources, or strategic vision to succeed in the long term, having been built to take advantage of temporary conditions such as government subsidies rather than to compete sustainably on the basis of performance, customer experience, or operational efficiency. These MVNOs have found themselves burdened by technical debt, regulatory complexity, and customer expectations they weren't prepared to meet.

Looking to Europe: A model of modernisation

Even as these challenges mount, hope can be found in the example set by other markets, however. The European MVNO market, for example, offers a proven model for what a modern, sustainable approach can look like. In Europe, the focus has shifted decisively from raw connectivity to full-stack enablement. Operators are no longer just resellers of network access; they are service providers built on cloud-native platforms that unify billing, provisioning, customer engagement, and analytics. These platforms are not just technical infrastructure; they are strategic assets that allow MVNOs to innovate, adapt, and scale with speed.

By contrast, many U.S. MVNOs are still tethered to patchwork solutions held together by middleware and manual processes. The complexity of their systems often leaves them unable to move quickly or launch differentiated offerings. As consumer expectations for seamless digital experiences continue to rise, this gap becomes not just a technical issue but a competitive liability.

A meaningful reinvention of the U.S. MVNO market will require more than piecemeal upgrades. It demands a foundational shift toward platform-based thinking. This means investing in technology that simplifies the core functions of telecom operations rather than layering new tools on top of broken systems. It also means cultivating industry partnerships that focus on shared innovation rather than short-term transactional gains.

Redefining success in the MVNO space

Crucially, this transition will require a recalibration of how value is measured in the MVNO space. The historical emphasis on securing favourable wholesale rates must give way to a broader understanding of what drives long-term performance.