Way ot SOG Comment...Got Milk or the bridge?
and all cut and pastes by me, please do not attempt to do this on your own and take this for what its worth, a continuation evalusation from my vacation;);0:
With that discalimer mentioned, I keep reminding myself that we/neom have a 10 year partnership with Virgin....Sweeeeeeeeeeeeeet....I keep reading this and reading this over and over, it is amazing...maybe because when I read this I just get blown away, and please excuse me while I kiss the sky but thanks to all here, it is a truly (in jmho) board
These initiatives, known as mobile virtual network operators, are expected to triple in size over the next five years, serving 29 million customers and generating US$10.7 billion in annual revenue by 2010, according to Yankee, a Boston-based technology research firm. Last year, these operators had about 10 million subscribers and $1.9 billion in revenue.
These initiatives, known as mobile virtual network operators, are expected to triple in size over the next five years, serving 29 million customers and generating US$10.7 billion in annual revenue by 2010, according to Yankee, a Boston-based technology research firm. Last year, these operators had about 10 million subscribers and $1.9 billion in revenue.
These initiatives, known as mobile virtual network operators, are expected to triple in size over the next five years, serving 29 million customers and generating US$10.7 billion in annual revenue by 2010, according to Yankee, a Boston-based technology research firm. Last year, these operators had about 10 million subscribers and $1.9 billion in revenue.
Partnerships of this sort already have been highly successful for Sprint, which embraced the approach earlier and more aggressively than most others in the wireless industry. Sprint won 2.3 million additional subscribers this way over the past year, making them its largest and fastest-growing source of new customers.Partnerships of this sort already have been highly successful for Sprint, which embraced the approach earlier and more aggressively than most others in the wireless industry. Sprint won 2.3 million additional subscribers this way over the past year, making them its largest and fastest-growing source of new customers.
"It is continuing to grow," said David Bottoms, Sprint's vice president for strategic partnerships. "It is an important segment."
"It is continuing to grow," said David Bottoms, Sprint's vice president for strategic partnerships. "It is an important segment."
"It is continuing to grow," said David Bottoms, Sprint's vice president for strategic partnerships. "It is an important segment."
Focused Marketing
The approach works so well because pitches can be so finely tailored.
Sprint reaches out to the mass market with ads featuring Brian Baker, its trench-coated ad pitchman, traversing the country in a massive motor coach to dispense mobile communications advice. The company's standard marketing fare doesn't include references to pointy-headed garden gnomes or racy entendres.
For every new youthful wireless customer Sprint might win with such tactics, many more of the mainstream consumers it hopes to win probably would be confused, offended or simply not persuaded to sign up for Sprint service.
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"We specialize in the youth market," said Dan Schulman, chief executive of the wireless carrier that peppers its ads and Web site with irreverence, the risque and promises never to impose any bizarre fees only pointy-headed garden gnomes can understand. "Our whole business model is designed around the youth market."
The approach seems to work.
Started as a venture with Sprint and Richard Branson's Virgin Group about three years ago, the wireless carrier reached 3 million subscribers earlier this year and continues to grow, Schulman said.
Bringing the Outsiders In
The large and growing customer base tells part of the success story. Another key part is that Virgin is reaching customers who have not responded to other cell phone pitches. More than 60 percent of the company's customers are new to the wireless industry compared with mainstream industry trends where as much as 75 percent of cell phone users signing up for service switch from a different wireless carrier, Schulman said.
"We truly are opening up a new market segment," Schulman said."We truly are opening up a new market segment," Schulman said."We truly are opening up a new market segment," Schulman said."We truly are opening up a new market segment," Schulman said."We truly are opening up a new market segment," Schulman said.
"We truly are opening up a new market segment," Schulman said.
Amp'd Mobile, which is partnering with Verizon Wireless, has similar plans for signing youthful subscribers. The California-based wireless service is emphasizing specially designed telephones and mobile entertainment including games, music and videos.
Using its own Los Angeles studio and a traveling team, Amp'd will produce live and recorded video for its subscribers.
Developing specific content to be delivered over Verizon's high-speed service is a key part of the approach that Amp'd designed to attract business from the 18-to 35-year-old segment it is aiming at. Simply repackaging portions of television programs or music and pushing it onto wireless telephones is not sufficient to gain loyal youth subscribers, Amp'd executives have said, while describing the service they expect to launch before the holiday season.
"We believe we're the first mobile entertainment company," Don McGuire, the chief marketing officer of Amp'd, said at a wireless industry conference last month.
No Wild Pitches Here
ESPN, the Connecticut-based sports television network, considered a wireless service a natural way of advancing its main mission of serving sports fans.
"There is an insatiable appetite for information and entertainment among sports fans," said Manish Jha, senior vice president ESPN Mobile, which expects to begin testing a wireless service this year that will run on the Sprint network. The consumer launch for the service is expected in 2006.
ESPN could have provided content for a wireless carrier, but decided to get more involved through this type of approach because the service could be more readily customized, Jha said.
A consumer using a cell phone with Internet access could find sports information now, but it often would take more than half a dozen button clicks to find what he's after. The ESPN service will make news alerts, statistical information or possibly play-by-play information for games in progress much more readily available, Jha said.
ESPN Mobile subscribers will be able to make roster adjustments or follow the action for fantasy sports teams. Although he would not offer specifics, Jha said it would be reasonable to expect the service to offer specialized graphics and ring tones that might incorporate such exclamations as broadcaster Dick Vitale's "Awesome, baby!" or ESPN anchor Stuart Scott's trademark "Boo-yah!"
"Those are the things that give it more personality than traditional wireless service," Jha said. "We want to find ways to incorporate their signature stuff."
'Press 2 for English'
What Virgin and Amp'd are doing with the youth market and ESPN intends to do with sports fans, a trio of former Sprint executives hopes to do with Hispanic consumers.
Anthony Montoya had a great idea for selling wireless telephone service to Hispanic customers. One problem, though. He didn't have a telephone network.
With the possibilities of these partnership arrangements, that did not turn out to be such a big problem after all.
Montoya, a former Sprint marketing executive, started Movida Communications about a year ago with two other former Sprint colleagues, Jonathan Chambers and Joe Gensheimer.
With taglines of "el espanol es nuestro primer idioma" -- Spanish is our first language -- and "press 2 for English," Movida has designed an entire business around providing wireless service to Hispanic consumers. The company gained financial backing and other support from the Cisneros Group, which is involved with the Univision Spanish-language media conglomerate.
The service requires customers to pay up front for calling minutes and is sold through Wal-Mart, but it is not a no-frills offering. Movida has international calling plans and is eyeing other services such as daily horoscopes or updates for soccer games. Eventually, it might provide video clips.
Many of Movida's customers might not have big bank accounts, but they are willing to pay for more than a bare-bones service, Gensheimer said.
"I can't just be another plain vanilla offering," Gensheimer said.
The Partnering Game
Each of these companies won the support of the mega-carrier by offering a strong brand or a unique way to reach a lucrative segment of customers.
Sprint typically receives dozens of pitches a month from wannabe wireless sellers. Few move on to even semi-serious talks as Sprint says "no" to at least nine of 10 requests from prospective partners.
The telecommunications company was persuaded to share its network with Movida because the start-up appeared to be so well-positioned to win customers in the burgeoning Latino market, said Len Lauer, Sprint's president and chief operating officer.
"They will know that marketplace better than we will know it, at least over the next three to five years," Lauer said.
All things being equal, Sprint and other carriers would rather sell service directly to a customer. Before signing a contract with Virgin, Disney or Movida, Sprint makes sure that such a deal would not overlap with its own efforts to sign up those same customers.
"We are careful," Lauer said. "We don't want it to cannibalize our core offerings. We have invested a lot in our brand, in our stores and our people."
It also takes more than just a good marketing idea to win Sprint's support. The company has to have a lot of money.
Choosing a Teammate
Sprint will look for a partner with a strong brand, some sort of unique assets that can be bundled with wireless service and healthy finances, said Bottoms, the Sprint vice president.
"You can get by with two of the three as long as one of them is money," Bottoms said.
Sprint wants to make sure the company can pay for the use of Sprint's network. At least equally important, however, is whether the partner can deliver the promised marketing approach and provide good customer service that will reflect well on Sprint or whatever main carrier is supporting the service.
"The wireless business is an inherently difficult and expensive business to be in," Bottoms said.
While they do have to have solid financial backing, the second-brand companies can exploit niche opportunities much more readily than the large carriers in the wireless industry, said Richard Nespola, chairman and chief executive of the Management Network Group, an Overland Park telecommunications consulting firm.
The cost of capital, start-up costs and just general business costs are going to be much lower for the smaller companies, allowing them to succeed by tapping what would be a micro market to a company such as Sprint or Verizon, said Nespola.
"The major service providers are all in a mass market game," Nespola said. "They have to deal with huge numbers."
As the mainstream wireless market becomes increasingly saturated, these second-brand initiatives are likely to become one of the steadiest sources of new customers for carriers such as Sprint, said Amoroso, the Boston telecommunications industry analyst.
Fluctuations to Come
Virgin, Disney, ESPN and other big carriers such as Amp'd have the backing, brand and resources that position them well for success. The growth in this segment, however, will not be sufficient to support all of the start-ups that think they can get into the cell phone business.
After the current boom, expect a shakeout.
The market research division of a company called Light Reading has counted at least 22 of these second-brand companies now offering service.
The largest of the second-brand companies are going to corral most of the subscribers, Yankee's Amoroso said. She estimates that the big ones will claim as many as 24 million out of 29 million subscribers five years from now.
A handful of mid-tier companies will split 2.5 million subscribers, and about a dozen smaller firms will serve another 2.5 million subscribers, Amoroso said.
"We will see some smaller guys get eaten up," Amoroso said. "They will not be able to stay alive because of competition."