Posted by Jason on May 2, 2007 in
Mobile Market |
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When I wrote about the virtues of prepaid MVNOs a few weeks ago, I did not know that Virgin Mobile was about to file to go public. I’ve been reading their Form S1 and it seems to confirm what I said, both good and bad. The good news is that prepaid is the fastest growing segment of the market and Virgin has been able to acquire customers much more cheaply than the major carriers: they have no retail stores and they spend only $10 on advertising for each new subscriber versus $100 for Verizon. The bad news is that competition is intense – monthly churn is 4.8% versus 1.2% for Verizon – and despite having almost 5 million customers, Virgin Mobile USA has yet to turn a profit and has racked up over $500 million in debt.
More commentary on the mobile market in this week’s Carnival of the Mobilists, hosted by Dorrian Porter (CEO of another mobile startup, Mozes).
Posted by Jason on Apr 26, 2007 in
Mobile Market,
This Is Broken |
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Russell Buckley reports a claim that the global market for paid content on mobile phones is already worth $20 billion, while the market for paid content on the web is worth only $4 billion. I don’t know the ultimate source, but the numbers probably aren’t far off. Does this mean that consumers are happy to pay for mobile content, or that the mobile market is somehow healthier than the market for content online? Russell is doubtful, and he’s not the only one.
Consumers don’t have any choice about paying for mobile content. Carriers exert so much control over our phones that in some cases – I’m talking about you Verizon – we can’t get free content onto our phones even if the content provider wants to give it away. (more…)
Posted by Jason on Apr 24, 2007 in
Mobile Market |
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For more commentary about the mobile market, check out this week’s Carnival of the Mobilists at Michael Mace’s blog.
Posted by Jason on Apr 19, 2007 in
Mobile Market |
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I am skeptical about a lot of MVNOs. These companies used to be called resellers: they resell wireless service from one of the ‘legacy’ operators, under their own brand. Mobile Virtual Network Operator may sound fancier, but it’s the same strategy. The problem is that you are always competing with your own suppliers.
Running a carrier is a capital-intensive business, and most people assume that the MVNOs with the most money will win. But I am most skeptical about the big, well-funded, highly visible MVNOs, because they compete with their own suppliers for the most valuable customers in the market. Unless you can switch suppliers easily (they can’t) or you have some feature that your supplier cannot replicate (they don’t), this is usually a bad idea, no matter what you’re selling, be it books, groceries, or wireless phones.
I think the most successful MVNOs will come from the wrong side of the tracks: companies selling prepaid service to customers with no credit or low credit. (more…)
