Another MVNO Bites the Dust

Voce, the Beverly Hills-based MVNO, has joined the likes of AMPD, ESPN and Disney MVNOs (Mobile Virtual Network Operators) in the dumpster, amid hundreds of millions of investor capital written off as a bad idea.

Yes, it is hard to run a carrier, and apparently even harder to run a virtual carrier. What is the lesson here? I think you need to consider what it means to build a brand over night, and how $500 million dollars, or having the backing of Disney, does not help. The exercise here for the executives at these failed MVNOs was to take a bunch of cash, build a brand overnight, come up with new and creative ways to market, and take customers away from giants AT&T, Verizon and Sprint (while turning around and paying those respective firms a fee for each subscriber since those networks ultimately hosted the end user). I suppose on paper it looked great.

What is the secret sauce that Virgin has to compete? Or Boost Mobile? Or Helio? What part of the success (or failure) is dependent strictly on brand appeal? ESPN had an offer for sports fans, Disney for kids, AMP'd for hip teenagers, VOCE for rich MoFos...and they all failed to attract a subscriber base to simply break even.

First, switching costs are huge for individuals. Rarely can a person simply switch carriers on any day they feel like, and I would think this is the top factor of the failure rate. With most US consumers locked into a 2 year contract, there was not even a chance to get these people to move in bulk. I believe a more holistic, organic growth plan should have been in order for a strategy here, and from what I can see, this has been Virgin's plan. Boost and Helio have followed the same path as the others, and their lifespan does not look healthy. Sell short.

History of the company here: What happened to Voce? [IntoMobile.com]

gPhone / Android screenshots and information

Google finally announced its intentions recently to release a mobile phone operating system, dubbed Android (previously the name of the firm that created this system). The nuts and bolts of the OS can be found here: What is Android.

There has been, of course, rampant speculation for months on Google's intentions in this space, as there is in any space Google might approach (the latest rumor has Google buying Sprint...for 67 Billion or more).

So, what exactly is Android? From the horse's mouth: The Open Handset Alliance, a group of more than 30 technology and mobile companies, is developing Android: the first complete, open, and free mobile platform. To help developers get started developing new applications, we're offering an early look at the Android Software Development Kit.

Google is moving forward quickly on this, and recently offered $10mil to developers interested on working on Android-based projects. Check our the coverage of Googles offer at ReaWriteWeb.

"the first complete, open, and free mobile platform." As blogged about before, we (Movaya) are very excited about this concept, as it leads us to believe the entire industry is truly moving towards open standards, like in parts of Europe. We could one day be faced with buying phones FIRST, then selecting our preferred carrier, THEN getting the content, applications and what not, all in our own way and without limits. That is exciting.

CTIA State of the Union

The MPB team spent the last few days at the fall CTIA show in San Francisco. For those of you not familiar with CTIA, they host two events per year - the "Big Show" which takes place in the spring, and the fall show. There were lots of announcements (far too many for us to report on) but we will post a couple highlights that we saw later this week.

In terms of the overall market, things are moving briskly, with the following stats being reported by CTIA:

-As of June 2007 the U.S. wireless consumer market surpassed the 243 million subscriber mark, representing roughly 81% of the overall national population.

-U.S. subscribers now send an average of 1 billion text messages every day, transmitting 28.8 billion messages in June alone.

-Wireless data service revenues for the first half of 2007 rose 63% year-on-year to $10.5 billion. Data revenues account for 15.5% of all wireless service revenues.

-Wireless subscribers in the U.S. sent 2.6 billion MMS messages during the first half of 2007, which is nearly twice as much as last year.

-Wireless customers used more than 1.1 trillion voice minutes in the first half of this year, up 18% year-on-year.

Democrats Rip into Wireless Carrier Practices

The Senate Commerce committee yesterday held a hearing about consumer wireless issues. Democrats complained about dropped calls, censorship and deceptive bills, while calling for stronger regulation of the industry. Republicans maintained that a lighter regulatory touch would prove more effective.

Sen. Byron Dorgan, a Democrat from North Dakota, even called for net neutrality laws citing locked phones and limited software availability as evidence of a need for more regulation. Sen. Jay Rockefeller, a Democrat from West Virginia, claimed that "in the last few years, traditional and wireless carriers have concocted a number of line item charges, fees and surcharges."

Here at the MobilePhoneBlog, we are generally against government involvement with private business but the issues the Democrats bring up are worth thinking about for sure. No one I know likes locked phones and being told what software they can run on their devices.

For more on the hearing, read this write-up from eWeek.