Zero credit check MVNO launches on Sprint

A new MVNO has launched on Sprint’s mobile network in the USA, with the promise of requiring zero credit checks for its customers. Madstar Mobile piggybacks on Sprint’s cellular network, and subsequently promises 3G or 4G LTE to more than 96% of the USA population.

According to financial analysis website credit.com, 75% of the US population are actively managing debt, which can cost the average American up to $279,000 in interest payments over a lifetime. Therefore, it seems entirely feasible that there is a gap in the market for a mobile operator with zero reliance on having a positive credit rating.

Of course, with such risk inevitably comes a cost. Madstar Mobile charges up to $66 per month purely for 1GB of data and a limited text and minutes plan. When comparing this to other major mobile players in the market, we can see that T-Mobile offers unlimited plans for voice, text and 3G data as well an additional 3-5GB of 4G LTE data, for between $60 and $70 per month.

While it may not look too favourable when compared to T-Mobile, Madstar tariffs aren’t too far out of alignment with Verizon’s $60 per month, Single Line Tarriff which promises unlimited voice and texts with 1GB of data.

Madstar also prides itself on offering an “industry changing program” it calls “bring your own mobile device”, or what the rest of the industry already calls pay-as-you-go, or prepay.

“Our goal is to provide subscribers with a cost effective, convenient and reliable wireless service using the device of their choice. To provide our subscribers coverage confidence with reliability, we are grateful to have an agreement with Sprint that provides national 3G and 4G LTE,” said David Pearsall, Founder & CEO of Madstar Mobile. “Wireless devices and service have become a necessity, not a luxury and should be affordable to everyone without the need to prepay now for the right to service later.”

While the basic offering may not be seen by the wider industry as hugely disruptive, it may be interesting to monitor how appealing or successful the service may appear to a section of the US market currently unable to take out new credit. It appears that taking a slightly different approach to service delivery seems to be a hot topic for MVNOs at the moment, with peer-to-peer-based MVNO JOi Telecom launching last month.