Say hello to yet another MVNO. Andy takes the covers off XeroMobile, a Los Angeles based MVNO, which he says has raised $300 million in European money. No details on who the investors are, and what is the game plan, but like two other Southern California […]

Say hello to yet another MVNO. Andy takes the covers off XeroMobile, a Los Angeles based MVNO, which he says has raised $300 million in European money. No details on who the investors are, and what is the game plan, but like two other Southern California companies – Helio and Amp’D – it has attracted major dollars. Earlier this month, sports junkies focused ESPN Mobile launched at the Superbowl.

Many of the newer entrants seem to be skating on thin ice. Despite some over optimistic surveys and general enthusiasm (more than three dozen different MVNO operators already) the biggest (and only notable and notable success thus far) have been two: Virgin Mobile and Boost Mobile. A few of the low-price resellers aka MVNOs are doing well but purely on price.

I like to think of MVNO as the new CLECs (competitive local exchange carriers) that were going to eat Bells’ lunch. What they did instead, ate up lot of investor dollars. Why? because CLECs depended a lot on the Bell pipes. MVNO’s are no different – they depend on the generosity of wireless carriers. Of course, carriers would be happy to help, if you give them a piece of the action as both Boost and Virgin did.

Anyway as 3GSM gets underway in Barcelona, expect more MVNO buzz.
MVNO Train Wreck is Coming
Damp’D and Troubles Awaiting MVNOs

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  1. What about AMP’d mobile?

  2. With the surge in the MVNO business, who ultimately benefits? The wireless tower companies (American Tower, Crown Castle), handset manufacturers (Motorola, Nokia), wireless carriers (Verizon, Cingular) or the consumer themselves due to lower prices? Any thoughts/comments?

  3. I don’t disagree that the new group of MVNOs pose a tough bet. That said, I do think that the complexions and drivers for CLECs were a lot different than MVNOs.

    Many CLECs filed for their status because they wanted more favorable pricing on transport, so they could get more margin for their ISP businesses. Others focused on delivering telephony services to business, to fill in the gaps where Bell left off. In any case, CLECs were born into this genre, whereas MVNOs are pushing into it.

    MVNOs are driven by niche opportunities and/or brand differentiation, and less by getting cheaper costs on existing business. The brand guys are playing up brands that have already tapped the masses. Their ultimate challenge will be mapping reasonable and interesting services to their already working brand….otherwise known as execution. The newcomers will probably do a better job productizing, but will struggle getting to critical mass.

    So FWIW, the outcome may end up being the same with MVNOs as was with CLECs, but for very different reasons and drivers.

  4. What about ethnic or cultural MVNOs? It could be a different market with services targetting different groups.

  5. Jesse Kopelman Monday, February 13, 2006

    Biren, it’s not going to be tower companies. Even if MVNOs drive network usage high enough to necesitate the construction of new “capacity” sites, those sites will generally be on existing buildings, not new towers. Everyone else on the list should benefit. Also add in network equipment makers (usually the same guys who make the handsets). A final note is that MVNOs won’t drive down prices (it’s hard for them to undercut the people they are buying the airtime from), but they will accelerate the introduction of new and different services and rate plans which is also good for customers.

  6. In the short-term it is the consumer who greatly benefits from the choice to choose their own niche mobile provider at a reasonable price. It also helps to cement the network coverage grip that the largest telecom companies (Verizon, Cingular, Sprint) have on wireless spectrum. The benefits of additional capital to expand uncovered areas also exist, but historically the funding doesn’t always flow where it should.

  7. It is obvious what’s going to happen. A few MVNOs will survive. Most will eventually be acquired back by the major carriers – at a much reduced rate. MVNOs = eventual lower cost of acquisition for the major carriers.

  8. I think MVNOs are just a way for carriers to try different business models with someone else’s VC money.

  9. Xeromobile are run by the same people who ran Gizmondo. Nice background in fraud

  10. WOW Xero Mobile’s plans to revolutionize the cellular industry is an excellent way to unleash this company’s true feelings about the money-saavy college student. I heard that they will offer some of the most affordable pricing ever along with top notch phones at wholesale market pricing. Has ANY company done this before? I seriously doubt it. Despite all the negative issue behind the company, this will proove to the community how much the average person shall be valued over the “corporate.” Many other cellular companies proffit majorly off of sales of phones and service. This company will not.

    The suprising efforts that XERO MOBILE will make are tremendous. The overall savings will be around 40% from what everyone pays now. That is simply amazing. When a company cares about its own pricing rather than profits, what can go wrong?

    When this service launches, im sure it will do great. As a cellular phone company, i believe they will offer some of the best service FREE or low cost…Making it a COLLEGE Students dream to sign up. ESPECIALLY WITH NO CONTRACT!!!!

    This Service will be simply amazing. I am a college student from UCLA so i know it will bennefit me on my behalf as it will to any other college around the nation.

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