Disney Investigating The MVNO Business

MVNO (mobile virtual network operators, if you haven’t been following the space) are when a non-carrer company (usually some sort of consumer or entertainment brand) does a deal with a wireless carrier to offer a “new” wireless service under their own brand. The real wireless carrier handles all the technology, and the “brand” handles all the marketing. For years, I could not understand why MVNOs weren’t more popular in the US (or, even, in existence at all). Now, as Virgin Mobile US seems to be doing pretty well with their MVNO offering Disney is exploring the possibility of setting up their own MVNOs for their various brands, including ESPN. The article linked here is summarizing a (paid subscription only) article in the Wall Street Journal which also says that Qwest is talking to Sprint PCS about using Sprint’s celllular network. The details aren’t entirely clear, but it would be intersting if Qwest (who has a very weak cellular offering) was also going the MVNO route. That might not be the case, as they may just be using Sprint’s network, and doing all the rest themselves – but it would be interesting to see what would happen if other telecom firms went the MVNO route. Why bother doing the heavy lifting yourself, if someone else will do it for you? Of course the obvious answer to my own question is that people don’t want to share revenue. However, if a company is much better and more efficient at handling a cellular network, doesn’t it make sense? It can almost be seen as the same thing as having Amazon.com handle the backend technology for a variety of other e-commerce sites, including their “competitor”, Borders Books.

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