How Many MVNOs Are Too Many?

from the getcher-phones-now dept

It shouldn’t come as a surprise to, well, anyone, that ESPN is launching an MVNO. The plans for just such an offering were discussed a year and a half ago, and there has been plenty of talk about the offering since that first story came out. It also shouldn’t surprise anyone that Sprint is providing the network, as Sprint is increasingly becoming the NO everyone goes to in the US for their MVNO. What’s interesting, however, is the question of how many mobile operators are needed — whether virtual or not. Part of the reason why everyone was expecting mergers along the lines of Cingular/AT&T Wireless was that there were “too many operators” out there, meaning no one could profit. Does that situation change when the operator goes virtual? Actually, it does. Since Sprint is already running the network and a bunch of other MVNOs, the incremental costs for offering another one isn’t that big a deal. Meanwhile, the MVNO company (in this case, Disney/ESPN) doesn’t have to bother with the network costs at all. What’s going to be tricky, however, is convincing people that they actually want to buy a phone from ESPN — not a brand most people associate with mobile phones. With all this MVNO niche targeting, however, there are some risks that Sprint may be put in a tough position of competing against their own customers. Will Sprint be happy if they’re losing customers to their MVNO partners? They still get money (so it’s better than losing them to Cingular/Verizon/whoever), but it may present some difficult choices for Sprint and their MVNO partners.

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Comments on “How Many MVNOs Are Too Many?”

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DV Henkel-Wallace says:

Just branding

It’s like sports team credit cards or airline cobranded credit cards etc. Essentially the market can likely tolerate an infinite number of them, especially with mobile number portability.

In fact you’ll likely flash your affinity-cobranded telephone around more in public than you’ll flash your cobranded credit card!

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