In the UK (as well as other countries), mobile phone services are provided by either Mobile Network Operators (MNO) or Mobile Virtual Network Operators (MVNO).
Both types of companies offer similar services, but they differ in the way they operate and the resources they have available to provide those services.
MNO (Mobile Network Operators)
Mobile Network Operators (MNO) own and operate their own mobile network infrastructure. This includes the physical hardware infrastructure like cell towers, radio masts, antennae, as well as the technical software systems needed to connect mobile phones to the network and provide services such as phone calls, SMS texts, and mobile internet data.
There are four Mobile Network Operators in the UK: EE, O2, Three, and Vodafone. Between them they provide all the network coverage available within the United Kingdom, and are responsible for maintaining and upgrading their hardware and software network infrastructure.
MVNO (Mobile Virtual Network Operators)
Mobile Virtual Network Operators (MVNO) on the other hand are companies that provide mobile phone services but do not have their own network infrastructure. Instead, they purchase wholesale access to an MNO's network through lease agreements, and resell it to their own customers.
These are some of the many MVNOs in the UK: ASDA Mobile, BT Mobile, giffgaff, iD Mobile, Lebara Mobile, Lycamobile, Plusnet Mobile, Sky Mobile, SMARTY, Superdrug Mobile, Talkmobile, Tesco Mobile, Virgin Mobile, VOXI.
MNO vs MVNO
MVNOs are an attractive choice for many consumers because they can usually offer lower prices than MNOs due to their lack of infrastructure costs. They also have the flexibility to tailor their mobile plans and services to specific types of customers, such as offering low usage packages for budget-conscious consumers or no contract or monthly plans for customer who do not want to commit to a one or two year mobile contract period.
Mobile network coverage for an MVNO will typically be the same as that of the MNO that they use. For example SMARTY (an MVNO) has their mobile network powered by Three (an MNO) network, so coverage will be the same for both of them. However this is not guaranteed to be true in all cases.
Depending on the business agreements between the MVNO and the MNO, certain services (like 5G, VoLTE, WiFi Calling) may not be on offer or the network capacity and mobile internet speeds might be limited on the MNVO to ensure customers of the MNO are not negatively impacted during busy periods when the network might be congested.
Therefore the advantage with using one of the main MNO is that they have the resources to provide more mobile services because they operate the infrastructure that the mobile networks run on. They also carry a larger inventory of different mobile phone handset plans, whereas MNVO typically focus on SIM only plans, where you use your existing mobile device to keep costs down.
In conclusion, the existence of both MVNO and MNO can only be a good thing for consumers, because it gives you more choice in what mobile phone and/or SIM plans are available to purchase depending on your needs, location (for mobile network coverage) and budget.