Update 1: 3:45 PM PT 5/11/16; I have received an email from Defense Mobile CEO, Anthony V. Montoya stating that Defense Mobile is not shutting down. According to Mr. Montoya, "While we will no longer offer GSM service, we will attempt to maintain those customers effected." However, the Defense Mobile CS phone number still answers with a recording stating that that Defense Mobile is no longer able to remain in business and will be closing it's doors at the end of this month. I asked the CEO to explain the discrepancy between his statement and the CS message as well as for details about Defense Mobile service going forward. I will update this post if and when I hear back from him.
Update 2: 8:30 AM 5/12/16; I haven't back from the CEO but the recorded message that plays when you call Defense Mobile has changed. It now says that Defense Mobile is undergoing a business transformation and that only email support is currently available. SIMs and phones are showing as out of stock on the Defense Mobile site. A message on the website's phone sales page says that Defense Mobile is not accepting new orders at this time.
Update 3: 4:15 PM PT 5/12: Fierce Wireless is reporting that Defense Mobile is undergoing a business transformation and is not currently accepting new customers. Fierce Wireless quotes Defense Mobile COO Stan Simpliciano as saying," Defense Mobile is still operational and providing mobile services to its existing veteran, active military members and customers... We are going through a business transition and have temporarily stopped new activations and expect to resume activating new customers soon."
Update 4: 8:30 AM PT 7/1: Defense Mobile ended GSM (AT&T) service on June 15, 2016. On June 29, 2016 Defense Mobile CDMA V (Verizon) customers received an email stating that CDMA service was "winding down" and that customers should port their numbers to another provider ASAP. One day later, on June 30, 2016, multiple customers reported here and on Defense Mobile's Facebook page that their service has been suspended.
Original post from 11 AM 5/11/16: Yet another prepaid MVNO appears to be going out of business. Defense Mobile, a four year old operation that catered to military personnel, veterans and their families has stopped activating new accounts. Service to existing customers stops at the end of this month. Defense operated on the Sprint, Verizon and AT&T networks.
Defense notified its dealers of the shutdown yesterday. There's no mention of the impending closure of the Defense Mobile website. But if you call the Defense Mobile customer support number, 844-815-9223 you will hear a reported message confirming the shutdown. According to the recording, the only way customers can get support now is by clicking the "Open Support Ticket" button on the Defense Mobile website's Contact Us page. If you are a Defense Mobile customer and want to keep your number, I recommend using that button to get you account number and passcode as soon as possible for porting purposes.
Defense's demise follows that of PTel which shut down in February after 15 years in business, BYO Wireless and Solavei which both folded in December and Voyager Mobile which went out of business last September.
The prepaid MVNO business is a highly competitive and low margin one. MVNOs come and go, but I don't think I've ever seen so many go under in such a short time before. It seems to be harder and harder for traditional MVNOs to compete. At the $30/month price point and up, carrier owned Boost, MetroPCS and Cricket, have have added lots of data to their plans The operators don't seem to have lowered the wholesale data prices they charge their MVNOs sufficiently to allow the MVNOs to offer comparable plans. MVNOs are now only competitive at the low margin, sub $30 price point. Even at the low end, traditional MVNOs now have to compete with freemium MVNOs like RingPlus and FreedomPop, which I suspect are subsidized by Sprint in effort to maintain market share.
These are tough days for MVNOs. Based on recent history I believe that any MVNO can fail. TracFone which is huge and thus has considerable bargaining power with the mobile operators probably won't, but the others all seem vulnerable.
MVNOs still offer some of the best values at sub-$30/month price points. I wouldn't be afraid to use a MVNO but be prepared for change. Now might be a good time to port important numbers to Google Voice so that you can easily hop from carrier to carrier without the number porting hassle every time.