Summary:

The success of virtual mobile operators like Virgin Mobile and Boost Mobile makes me wonder if it is time for us to be contemplating a virtual broadband service provider model for consumers and professionals. The increasing number of alternative broadband offerings makes it quite feasible, at […]

The success of virtual mobile operators like Virgin Mobile and Boost Mobile makes me wonder if it is time for us to be contemplating a virtual broadband service provider model for consumers and professionals. The increasing number of alternative broadband offerings makes it quite feasible, at least from a technical standpoint.

Over last few months, WiFi services like Boingo, T-Mobile Wireless, and iPass have added more heft to their offerings, and have seriously boosted their footprint. Pre-WiMax services from the likes of NextWeb, TowerStream, and Speakeasy are now available in more and more locations. Municipalities and cities are building their own infrastructure, despite some serious opposition from incumbents, and are making broadband available to their citizens. And then there is the growing 3G footprints!

The biggest problem with all these offerings is that they are like those islands in the Caribbean – to get there you have to take an expensive ride in a ferry, a boat or an amphibious plane. You get WiFi at Starbucks if you have a T-Mobile subscription, but that won’t work at Tullys’ where you might need Boingo. If I started subscribing to many of these offerings, the seamless mobility becomes too expensive. Fixed broadband at home, and virtual voice services like Vonage and Broadvoice only make everything more expensive.

While, we talk about convergence as blending of voice, video and data, it would be more helpful if we had more modest goals – just data and voice, over fixed and wireless networks. In other words seamless broadband, and some voice offering tacked on top of it – all for a reasonable price, says $150 a month.

For $150 a month, I would like a WiFi service that works anywhere, a 3G data connection, a VoIP plan, and some type of connectivity at home – be it DSL or cable or anything really. As discrete elements, these services are simply too expensive: $80 a month for 3G, $20 a month for any one WiFi service, $40 a month for fixed line broadband, and $25 a month for unlimited VoIP service. Total: $165 a month. Add more WiFi to the mix, and you see prices go higher.

On paper it might seem that the savings are not that much – but if your really took your broadband usage patterns and plotted them, it is clear that you cannot or don’t use one specific service enough to justify a full monthly subscription. Hence a virtual package makes a lot more sense. A special marketing twist – say a focus on Music services or better mobile email (via Good or Blackberry) across many devices or even a special demographic twist can make the packages more attractive, and give opportunity to more than a couple of players.

Having said that, I admit, that putting together a VBSO is not going to be easy. I mean the whole OSS, and billing infrastructure would have to be put together, in order to allocate revenues according to usage amongst various partners. Then you will need a software package and a combo-modem/PC cards (WiFi+3G+pre-WiMAX in some combination) and of course the biggest X-factor of them all: the relationships with existing incumbent broadband providers who are trying desperately to weasel out of opening and sharing their pipes with just about everyone.

I think the company best positioned to offer this type of ‘aggregated package’ in a VBSO model is Earthlink, rather their SK-Earthlink offering. If and when they do come out with this offer, I am pretty certain that I would be one of the first to sign-up. Anything to save $50 off my ever-increasing digital lifestyle expenses.

Also, Virtual Network Operators

By Om Malik

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