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Mobile Mvno Predictions
By Josiah William
This will no doubt be a happy new year for some mobile phone companies, a sad year for some, and a very sad year for others.
The beginning of the New Year is the time for resolutions and predictions. Let me make some predictions on who will be the winners and losers in the prepaid cellular and MVNO arena for 2006.
I will start with the small prepaid MVNOs. Bad press is better than no press; that is at least what I heard. This will probably be my only mention of this list of companies.
Accell, Airvoice Wireless, Beyond Wireless, Extreme Mobile, EZ Link, iwireless, Graffiti Prepaid, PagePlus Prepaid, Omni Prepaid, O Mobile, MobilePCS, M3 Wireless, all either have weaknesses, obstacles, or just no reason for someone to buy their product. Some are in the process of changing from TDMA to GSM technology, others are under funded, others have high costs and others have poor marketing. I wish them well, but my prediction is you have not heard of most of the companies listed above and probably never will.
I have heard some good things about Callwave, Oxygen Mobile, and Liberty Wireless, but they are no longer competitive with the new rush of major players.
Bravo Cellular is small player that has an above average program that is very similar to the larger player, STi Mobile. Bravo and STI both use Sprint and offer competitive direct dial international rates. However, STI beats the Bravo rates, phones, and distribution by a good margin. Sorry Bravo Cellular, you are not good enough, but at least I gave you a paragraph.
I will jump from small to large MVNOs and prepaid programs.
STi mobile is a division of STi. STi is a major player in the prepaid calling card market with over $200 million annually in sales. STi mobile offers nice new LG Flip phones, aggressive rates, and extremely aggressive direct dial international rates. I would have considered them a medium MVNO program, but they stepped up to large with distribution agreements with Staples, CompUSA, and other chains. I predict success for STi.
Boost Mobile offers push to talk, excellent marketing, is owned by Sprint/Nextel and seems to want to be competitive with rates. I have heard they are not always in tune with their distribution and have some technical issues. However, they have 1.9 million subscribers so I predict continued success.
Tracfone and Net10 are the same company. They were the first successful MVNO with a distribution in the Wal-Mart chain. They have a large base of profitable customers and are aggressive marketers. However, they have always been boring to me. They made a major push with the Net10 brand, but it seems to me someone could have thought of a better 2nd brand. They even advertised on American Idol. They lack any hype or great offerings. This will be a good test to see if big distribution, a current profitable base, and aggressive marketing (even though off base) are enough. I predict success this year, but that is about it.
Virgin Mobile is the largest MVNO with over 3 million subscribers. While you can get a better deal and product from other carriers, they are already successful so I predict continued success.
The Cingular Prepaid Go Phone program offers really cheap phones, pretty good service, slightly high rates and invests a ton of money in marketing. I predict success because they can buy success.
The T-Mobile prepaid program offers decent phones, aggressive advertising, competitive rates, and has the backing of T-Mobile. They also have some loyal and satisfied customers. I predict continued
success.
Up and Coming Prepaid Companies
ESPN Mobile and Disney Mobile are coming, but I have no information on their programs, so I decline to comment. However, I don’t understand why someone would buy a phone from them. I could see them providing content for other providers, but not function as stand alone MVNOs. They do have plenty of money to throw at this, so see what I know.
Ampd Mobile has a lot of money with $67 million or more in private funding and a $50 million investment from MTV. They were founded by Peter Adderton (I mention his name because he seems to like his name mentioned), also the founder of Boost Mobile. They claim they will offer revolutionary functions, service, and media from their phones, geared toward the youth market. I don’t have the guts to give them a thumbs down prediction, but they utilize Verizon, who has not been a great provider of service for MVNOs. Verizon also publicly has said they can develop their own youth-oriented marketing plans. It seems Ampd has it all, but if they do not have Verizon’s support and best deal, nothing else matters. I think they are exciting and entertaining so I wish them the best.
An interesting company is IDT. They are developing prepaid wifi cellular. IDT is a major international long distance carrier. Their plans in the future are to offer low international rates through cheap wifi mobile handsets. They also currently have a standard MNVO prepaid program called TuYo mobile. IDT has not revealed which carrier’s network it is using to deliver the MNVO services, but has said its partnership is with a “major GSM carrier,” which narrows the field to either Cingular or T-Mobile USA. Their TuYo mobile program is very similar to STI mobile in regards to service and international rates. It is only offered in four markets and they have started cautiously. I predict IDT will have success in a few years, but looks to be playing it safe this year.
For some reason, I am excited about Helio. It may be the $450 million in funding. It may be the technology of SK Telecom. It may be the CEO who also founded Earthlink.net and Boingo Wifi. I am most excited about what SK Telecom can bring to the table. They are the leading provider in Korea and are cutting edge with high end media offerings through great phones. They also seem to know marketing and pricing. It’s almost a perfect concept, except that I think Helio will be using Verizon as their back-bone provider. As I said with Ampd, it will be interesting to see if Verizon has changed and is now willing to give competitive support and rates to an MVNO. It is not whether they can do it….. it is whether they will do it.
I am a small business owner so I hate to predict the big guys beating the small guys, but it looks to me that enough big players in the prepaid MVNO market have their act together to make it tough for the small guys. However, small business owners should not be discouraged, because it is amazing how often major companies in any industry get tangled up in their own red tape, lose their focus and understanding of their customers and market, and let the small companies clean their clocks.
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