 |
 | Home | Contact Us | FAQ | Search & Site Map | Link to Us |
 | Sign In | Join | Other 45 Sites in Network |
| HomeDiscussion Groups General General TopicsGSMBluetoothProviders AlltelATT WirelessCingularFidoNextelSprint PCST-MobileVerizonManufacturers EricssonNokiaMotorolaCountry Specific Australian GroupUK GroupRelated Topics PocketPCPalmMore Topics ... |
Cellular Phone Forum / Providers / Cingular / August 2006NEWS: MVNO bubble about to burst in the US?
<http://www.theregister.com/2006/08/14/mvno_bubble_bursting/> The much hyped bubble in MVNOs (Mobile Virtual Network Operators) in the US is close to bursting, according to new research from Strategy Analytics. It has found that many of the best funded MVNOs have misunderstood their core target markets, and that, while the better established, youth oriented outfits like Virgin Mobile, Tracfone and Sprint Nextel's Boost have thrived, the new breed - such as EarthLink/SKT's Helio, Disney Mobile and Mobile ESPN - have adopted more ambitious business models but have failed to capture the consumers' imaginations. The heavily marketed new entrants have "failed to learn lessons from their predecessors. The handsets are boring, pricing uninspired, and the distribution strategy is flawed. This is a threefold recipe for failure," writes Strategy Analytics' David Kerr. At the end of 2005, Tracfone, Virgin and Boost accounted for 65 per cent of the US MVNO market, relying on the prepaid services that their youth audience prefers. The new wave does not look set to make much dent in this market share in 2006, and already all the big names have been forced to adapt their business models to put more emphasis on basic voice services and less on advanced data and multimedia options - which consumers may buy as extras, but do not want bundled into a standard price that then looks expensive. [MORE]  SignatureBest regards, FAQ FOR CINGULAR WIRELESS: John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ> > <http://www.theregister.com/2006/08/14/mvno_bubble_bursting/> > [quoted text clipped - 6 lines] > youth oriented outfits like Virgin Mobile, Tracfone and Sprint > Nextel's Boost have thrived, Virgin and Boost have thrived because their "host" networks don't offer a prepaid service of their own. If you want prepaid Sprint service, you MUST get Virgin. If you want a prepaid iDEN handset with PTT, you MUST get Boost. And TracFone has survived because it pioneered the prepaid concept, and thrives now because it has a mature distribution network, and is ubiquitous in stores like 7-Eleven, Target and Wal-Mart. They successfully attract the lowest common denominator of the wireless market: teenagers and those adults with no or absolutely abominable credit who cannot get or cannot deal with postpaid service. Yet the risk is virtually zero because those customers must pay up front. It probably also helped that TracFone clung to TDMA to the bitter end before finally offering a GSM handset lineup. For a good while they were selling refurbs and manufacturer discards of old TDMA models that they received for practically nothing and sold for a tidy profit. > the new breed - such as EarthLink/SKT's > Helio, Disney Mobile and Mobile ESPN - have adopted more ambitious > business models but have failed to capture the consumers' > imaginations. I didn't see a point in these MVNOs, because at their base they are merely re-treads of the host carriers. Even the handsets are the same, albeit with different color schemes and sometimes a re-done user interface. > The heavily marketed new entrants have "failed to learn lessons from > their predecessors. The handsets are boring, pricing uninspired, and [quoted text clipped - 11 lines] > > [MORE] SignatureE-mail fudged to thwart spammers. Transpose the c's and a's in my e-mail address to reply. > > <http://www.theregister.com/2006/08/14/mvno_bubble_bursting/> > > [quoted text clipped - 33 lines] > merely re-treads of the host carriers. Even the handsets are the same, > albeit with different color schemes and sometimes a re-done user interface. The services are often "second hand" that have been tested by the postpaid crowd and debugged. For $80/year one gets basic service of about 320 minutes and the emergency usage capability. Many users determine that a prepaid service is cheaper for them. JG > The services are often "second hand" that have been tested by the > postpaid > crowd and debugged. For $80/year one gets basic service of about 320 > minutes and the emergency usage capability. Many users > determine that a prepaid service is cheaper for them. The other ones that have thrived financially, if not in market share, are the ones that _don't_ spend money on marketing, but have lower prices. I.e., $80 will get you about 600 minutes a year on PagePlus or the old BeyondWireless. These MVNO's probably only have a few employees, no advertising expenses, and minimal customer service expenses. The heavily hyped MVNOs are usually the worst in terms of coverage. Look for a CDMA/AMPS MVNO that allows roaming, Isaiah Beard <sacredpoet@sacredpoet.com> wrote in news:12e74c3o9fgk060 @corp.supernews.com: > If you want a prepaid iDEN handset with PTT, you MUST > get Boost. Will a Boost phone talk to a Nextel user group? I'd be interested in that.... SignatureThere's amazing intelligence in the Universe. You can tell because none of them ever called Earth. >And TracFone has survived because it pioneered the prepaid concept, and >thrives now because it has a mature distribution network, and is >ubiquitous in stores like 7-Eleven, Target and Wal-Mart. They >successfully attract the lowest common denominator of the wireless >market: teenagers and those adults with no or absolutely abominable >credit who cannot get or cannot deal with postpaid service. TracFone attracts more than just teenyboppers and credit-risk adults. I know adults that have impeccible credit who use TracFone. They are only occasional cell phone users and they have determined that their cellphone usage doesn't justify even the cheapest monthly plans that are required to get service from the big players. They don't really care what others might think of them for using TracFone. All they want a cell phone for is voice. I heard an "industry analayst" on NPR a few weeks ago make a statement along the lines that the big players like Cingular, Verizon, and Sprint only want customers who spend $50-$60+ per month, and they really don't worry too much when the lose a customer who spends less than that. I would venture to guess that there is quite a market of folks who would like cell service but can't justify that kind of money. Joe Huber huber.joseph@comcast.net >I heard an "industry analayst" on NPR a few weeks ago make a >statement along the lines that the big players like Cingular, Verizon, >and Sprint only want customers who spend $50-$60+ per month, and they >really don't worry too much when the lose a customer who spends less >than that. It's even trickier than that. when a cellular customer calls a wired phone, the originating company has to pay a "termination" or completion fee to the final destination company. If that second person is using a cell phone in the same network, there's no such expense. Similarly, if the phone is in an MVNO with an affiliation contract to the first compaany, the costs are less. (And there are some cross-cell-company agreements as well). So... it's in the cellular ocmpanies interests to get those cheaper phones out there, even if the user isn't a primary customer of theirs. Signature_____________________________________________________ Knowledge may be power, but communications is the key dannyb@panix.com [to foil spammers, my address has been double rot-13 encoded] > TracFone attracts more than just teenyboppers and credit-risk adults. > I know adults that have impeccible credit who use TracFone. They are [quoted text clipped - 3 lines] > care what others might think of them for using TracFone. All they > want a cell phone for is voice. While I agree with that statement, this market demographic is NOT how TracFone makes the majority of their profit. It is nice holding onto to someone's prepaid money for a while, but the revenue only really pours in from those who are moderate to heavy users of cell service, but have no other choice than to go prepaid and thus pay TracFone significantly more than the person who only uses their phone once a month or less. > I heard an "industry analayst" on NPR a few weeks ago make a > statement along the lines that the big players like Cingular, Verizon, > and Sprint only want customers who spend $50-$60+ per month, and they > really don't worry too much when the lose a customer who spends less > than that. That's largely correct. $50-60 a month is the "sweet spot" where a postpaid cell carrier begins to recoup their investment. Below that, it becomes hard to justify giving someone a free or discounted phone, and then continuing service. And while they may not actively kick you off their service (well, except for Cingular), they won't necessarily go out of their way to keep you, either. > I would venture to guess that there is quite a market of > folks who would like cell service but can't justify that kind of > money. I would say that Virgin Mobile, Boost and TracFone give one the ILLUSION of saving money, but often times their per minute rates are slightly higher than what you would get in postpaid service. Additionally, they do force a minimum purchase as well; if you don't use your prepaid minutes in time, or at least pour in more money and "top up" your account, the minutes expire and you lose what you paid for. If you've only used five minutes out of a $10 prepaid card and allow the rest to expire, then you've effectively paid $2.00 a minute for the privilege of using prepaid. SignatureE-mail fudged to thwart spammers. Transpose the c's and a's in my e-mail address to reply. > > TracFone attracts more than just teenyboppers and credit-risk adults. > > I know adults that have impeccible credit who use TracFone. They are [quoted text clipped - 37 lines] > expire, then you've effectively paid $2.00 a minute for the privilege of > using prepaid. VM accounts don't expire as long as you top up, and one can save up for heavier internet usage or photo xfers. $80/year beats standard contract commitments anytime. > -- > E-mail fudged to thwart spammers. > Transpose the c's and a's in my e-mail address to reply. > VM accounts don't expire as long as you top up, and one can save up > for heavier internet usage or photo xfers. Perhaps, but that still doesn't help the demographic that rarely uses their phone and only wants it for emergencies. If you're continually topping up the phone and not using all of that built up usage, you're goving the MVNO free money. > $80/year beats standard > contract commitments anytime. Perhaps. But it's still money thrown away. You would think that if someone's usage is low enough, they might just be better off "bumming" a phone off someone else in the rare instance they need to make a call. SignatureE-mail fudged to thwart spammers. Transpose the c's and a's in my e-mail address to reply. >> VM accounts don't expire as long as you top up, and one can save up >> for heavier internet usage or photo xfers. [quoted text clipped - 3 lines] >topping up the phone and not using all of that built up usage, you're >goving the MVNO free money. In my wife's case, she wants the security of a phone but typically uses it less than 30 minutes a month. She would much rather give the MVNO (Virgin, in her case) a small amount of free money than give a carrier a large amount of free money. The cost per minute is irrelevant; when the usage is this light only the total cost matters. When she was with Sprint, she was spending about $31 a month. With Virgin, she spends $16 every 3 months. It's a no brainer, made even easier because the cost per minute never even enters into it. SignaturePaul Miner > > VM accounts don't expire as long as you top up, and one can save up > > for heavier internet usage or photo xfers. > > Perhaps, but that still doesn't help the demographic that rarely uses their phone and only wants it for emergencies. If you're continually topping up the phone and not using all of that built up usage, you're goving the MVNO free money. Not really- that MNVO does have costs involved maintaining the account. > > $80/year beats standard > > contract commitments anytime. > > Perhaps. But it's still money thrown away. You would think that if someone's usage is low enough, they might just be better off "bumming" a phone off someone else in the rare instance they need to make a call. Many low volume users maintain prepaid phones for glove box "emergency" use. If you knew in advance when you were going to have an emergency, you wouldn't need a cellphone- you could just stay home! ;-)> $80/year is cheap "just-in-case" insurance, though I suspect you could find cheaper (i.e. T-Mobile PPD is $100 the first year, then $10/year thereafter.) SignaturePosted via a free Usenet account from http://www.teranews.com >Many low volume users maintain prepaid phones for glove box "emergency" >use. If you knew in advance when you were going to have an emergency, [quoted text clipped - 3 lines] >find cheaper (i.e. T-Mobile PPD is $100 the first year, then $10/year >thereafter.) For true emergencies all you need is an inactive phone, since the FCC mandates that 911 calls always be served. SignatureBest regards, FAQ FOR CINGULAR WIRELESS: John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ> > For true emergencies all you need is an inactive phone, since the FCC > mandates that 911 calls always be served. Sure, but there are emergencies and there are "emergencies"... Calling a tow truck or a taxi for a car that won't start isn't a 911 emergency but it's a nice time to have a phone. SignaturePosted via a free Usenet account from http://www.teranews.com >> $80/year beats standard >> contract commitments anytime. > > Perhaps. But it's still money thrown away. Think of it as fire insurance. If your house never burns down, would you consider the money spent on insurance premiums to be thrown away? > You would think that if > someone's usage is low enough, they might just be better off "bumming" a > phone off someone else in the rare instance they need to make a call. How are you going to do that if your car breaks down unexpectedly in some remote area? SignatureJohn Richards > I would say that Virgin Mobile, Boost and TracFone give one the ILLUSION > of saving money, but often times their per minute rates are slightly [quoted text clipped - 5 lines] > expire, then you've effectively paid $2.00 a minute for the privilege of > using prepaid. How much it costs per minute is not pertinent, except perhaps as an academic exercise. ;-) The significant thing is that you can find prepaid plans for as low as $6.75 per month. None of the postpaid providers will come even close to that monthly cost. SignatureJohn Richards > TracFone attracts more than just teenyboppers and credit-risk adults. > I know adults that have impeccible credit who use TracFone. They are [quoted text clipped - 12 lines] > money. > Joe Huber I am one of these. I could afford any phone service I choose, but my wife wants a phone for emergencies - about 3-6 1min calls per week. Virgin Mobile with auto top-up is 25c/min with a minimum of one $15 top-up per quarter. That means we can have a working CDMA phone and number for $60/year. And the best part is, the Nokia phone was $19.99 last Christmas. If I needed a Nokia battery, I'd buy a ppd phone, get the battery out, and throw the phone away. Jim Burks or, an open area to test Sprint's family locator features....i.e. Disney Mobile > > <http://www.theregister.com/2006/08/14/mvno_bubble_bursting/> > > [quoted text clipped - 49 lines] > > > > [MORE] |
Reply to this Message |
 Sign In
 Join
 My Latest Posts My Monitored Threads My Blog My Photo Gallery My Profile My Homepage Start New Thread Enable EMail Alerts Rate this Thread
|
©2008 Advenet LLC Privacy Policy - Terms of Use
This website includes both content owned or controlled by Advenet as well as content owned or controlled by third parties.