Instead, a smaller MVNO has a business relationship with a larger mobile network operator (MNO). An MVNO pays wholesale fees for minutes and then sells the minutes at retail prices under its own brand.
An MVNO, therefore, is an MNO reseller. An MVNO is actually a customer of an MNO rather than a competitor. An MVNO can typically set its own pricing following agreed-upon rates with its contracted MNO.
Boost Mobile, Virgin Mobile, Straight Talk, PlatinumTel and Consumer Cellular, for example, are all prepaid wireless MVNOs. T-Mobile and Verizon Wireless, for example, are MNOs.
Straight Talk uses the Verizon network. PlatinumTel uses the Sprint network. Consumer Cellular uses the AT&T network. Boost Mobile uses the Sprint network. Virgin Mobile uses Sprint in the U.S. and T-Mobile in the United Kingdom.
Virgin Mobile, which launched in the United Kingdom in 1999, was the first commercially viable MVNO. See here for a list of which networks are used by many prepaid wireless carriers.