Blog Post

MVNO Death Star: Affinity-Based MVNO Service Sonopia To Close Down

Sonopia, an affinity-based MVNO service founded by Juha Christensen and launched just a year ago, is closing down, reports Tapio Anttila on his blog, who himself was a former exec at Sonopia. Christensen was one of the founders of Symbian, and was previously the head of Macromedia

10 Responses to “MVNO Death Star: Affinity-Based MVNO Service Sonopia To Close Down”

  1. Man, don't over shoot salaries for Ukrainian programmers – they were earning 1,2-2k with 1,5 being average monthly salary.

    I am not sure there should've been much hardware investment costs beyond servers and load balancing, really.

  2. Shitopia

    You spend the money on very expensive equipment so that Verizon allow you to use their network.
    You spend a lot more than 500k on development. > 100 staff @ say an average cost of 2.5k per head is a burn of $250,000 a month.

    I for one would like to see what Christensen got out of this. Its a $21 million dollar lesson, it would be great to learn some of it.

  3. I'm quite amazed to see Sonopia sink so fast. I mean, this is not type of business the burns cash quickly, or was it burning fast?

    What can you spend $21 mln on? Extra cheap product development in Ukraine was probably some 400-500k.

    I was once interviewed for a position for studio director in Ukraine, but wasn't hired…and position wasn't filled anyway…

    I had gripes with the business model, mostly with its tie-in to Verizon only. Sonopia wasn't available on many phones, just a few select ones. They should have been more open in their approach and let users be members of multiple communities.

    Business model would have been building a large wireless community and charging for extra content as well as generating ad revenue from mobile traffic.

  4. Hindsight 20/20

    So as consultant/salesman/Sr. Exec. at what point did you advise Sonopia that "the US mobile market is so full of ‘friction’ that this type of innovation will not work" or were you just there collecting a check and riding it out.

    I am also still unconvinced that regardless of friction that this concept in plausible – "people would feel high affinity to a common cause such as a non-profit, political or religious organization." At what point in the homily is my priest suppose to give a pitch for mobile services, before or after the blood and body of Christ?

    I guess what I am saying is that being a mobile operator is hard work, expecting that a non-profit charity organization, baseball team, church, or any other "affinity" group can do it effectively without taking their eye off the ball seems far-fetched. I also think that your belief that individuals would adopt the phone service of the "Long Island Ducks" because they "really like the team" is ludicrous. But I could be wrong so tell me Tapio what affinity phone service did you subscribe to while working with Sonopia? I didn't think so.

  5. Fair enough, but it is not the whole story. Sonopia really had a chance and the story was solid and the benefits were there: (1) users contribute part of their phone bill back to the organization, (2) a social network platform ties users closer together and (3) partner organization lowers customer acquisition cost with ultra-effective marketing. The US mobile market is so full of 'friction' that this type of innovation will not work, despite the fact that the scale economies are present.

    As a result, Sonopia is now left with a good platform they built to operate at very low OPEX and which they can probably reuse in the future. In Europe all mobile networks have a homogeneous technology base and innovation takes place higher in the value chain.

  6. Hindsight 20/20

    I am not sure of Tapio's involvment – salesman, consultant or Sr. Exec. but even now his assessment seems amazingly naive…

    To quote his blog…
    "The idea of micro-segmented and community-driven mobile ‘micro-MVNOs’ was a smart one: people would feel high affinity to a common cause such as a non-profit, political or religious organization. They would rather compromise on fancy phone functionalities and take a subscription that would bring them closer to their favorite affiliation, something they really care about."

    Actually, people will not compromise on phone functionality (or service or plan structure) in order to "bring them closer to their favorite affiliation" I have a few very close group affiliations but tying those affiliations to a phone service doesn't even enter into my conciousness. I become closer to my affiliations through active participation, donations, and grass roots support at a local level.

    To draw a comparison, I love ESPN. I rely them to be my primary source for sports information. Note that I said "information", I don't want then to be my cell phone provider….Verizon does a pretty good job at that and offers me a broader range of services and devices, and is reliable AND I can get ESPN on my verizon phone. The only thing I would ever ask (not demand) is that my "affinity organization" investigate leveraging mobile to provide me information (be it a WAP site, text message updates, etc). I don't want or need (or trust) the "Long Island Ducks" to manage my phone service nor do I want or need Verizon to own or manage a minor league baseball team.

    When will you MVNOs get it?????????

  7. Funnily enough I know no Edgar… no need to flame but I am sure it feels bad to some people. I was indeed in no way part of the senior management, this is a reporting inaccuracy by MocoNews. The rest of the statements of 'Edgar' are inaccurate – all of them. Sonopia was a great idea on paper but it the execution failed. I am in no way throwing dirt on the great team – instead we all in the industry should learn from failures.

    I will reserve the rest of my comments to my blog – see you on MEOW! Blog.

  8. Technically he was a consultant on commission, never closed one deal and disappeared on "sabatical" for 3 months in the middle of the first year. A less reliable source couldn't be found.