If you had to pick one mobile virtual network operator (MVNO) whose success has spawned dozens of copycats (most of them failures), then you have to go with Virgin Mobile USA. By focusing on the younger demographic, the company has snagged about 4.83 million customers.
A joint venture of Sprint (S) and Richard Branson’s Virgin Group, Warren, N.J.-based Virgin Mobile (VM) went public today. Its shares were recently changing hands for $16, up 6.7 percent. Late Wednesday, the company priced 27.5 million shares at $15 each, raising about $412.5 million, reports Reuters. The new cash will be used to pay down its debt and buy out Sprint, whose stake currently stands at 16.7 percent.
The company had revenues of $667 million for the first six months of 2007 and a net profit of $26 million. And that took six years. My advice to all MVNO wannabes: Pick another way to spend your working life. Like managing the Yankees – I hear there might be a job opening soon.
Don’t count out Helio just yet especially if SK Telecom (Half Parent) will buy out Sprint (wooooo rumors)!
Om,
I see you are forgetting Boost Mobile.
Abhishek
I also think that Boost was the more influential – especially as to how MVNO’s marketed themselves. Still, one could argue that without Virgin their would have been no Boost. Meanwhile, what about TracFone? They’ve been chugging along all these years pretty much under the radar. I’d imagine they make money too, considering they are still around . . .
After reading your July 8, 2005 article, I am surprised about this piece. To call Virgin Mobile USA an MVNO is a misnomer (and so is Boost, which is the joint venture set up by a pre-merger Nextel); as you know there’s nothing virtual about it as the physical infrastructure is owned and run by one of the owners.
Tracfone seems to be doing well in a certain demographic
HR is correct. Virgin was a JV, not a true MVNO – sorta like living at home after college and ignoring that someday your economics change when you have to pay rent.
That’s reportedly going to happen when Sprint’s 16.7% is bought out. Virgin will supposedly be fully on their own and living on the wholesale margin as a true MVNO. As for Boost, it is essentially an internal, prepaid Sprint Nextel youth brand.
So, what’s the future of MVNOs? There are too many bodies lying around but I believe Kajeet (I am not affilliiated in any way) has a chance. Smart management, lean operations, meaningful distribution and adequate financial backing.
Overall, the money shredding by MVNOs has not been good for the wireless space.
E.
OMG. Look what I found! A Meet and Greet with Richard Branson and Elvis Costello”.How cool is this, I never thought I would ever have a chance like this. If you want a chance to bid on this visit this link. http://www.ebay.com/virginunite. There is this item up for grabs and many others. I think the auction page says that new items go up ever week too.
So who has control of virgin mobile Why is there many complaints.
I have had nothing but problems with virgin mobile. I can call three times and finally thr fourth time I MIGHT get someone who doesnt hang up on me. Then my issue doesn’t ever get resolved and I have some smart mouthed kid mouthing the words to a script that I know by heart by now, being that I was in customer service myself once upon a time. It’s just a scam. At least with Boost mobile you can get a choice of completely unlimited service for one price. Like sprint. I have three virgin mobile phones that are about to find the recieving end of a hammer and I will never return.
Please put down that hammer! On behalf of Virgin Mobile I would like to apologize for your situation. We pride ourselves on customer service and I am sorry that your experience with us was not a positive one. Please feel free to contact me at 1-908-607-4000. We can then look up your account and take the appropriate action. You’ll be pleased to note that Virgin Mobile USA now offers Totally Unlimited calling for $79.99/month plus taxes & surcharges.