A stroll through the MVNO graveyard
By Ryan Block 
posted Aug 26th 2008 2:10PM
posted Aug 26th 2008 2:10PM
Little did we all know that the differentiation most of these MVNOs had in mind was slapping their lame brand on some existing phone that people could get sooner, cheaper, and often with a better plan on one of the major carriers. Even Helio, the one MVNO that managed to keep gadget nerds' attention for more than 30 seconds, couldn't ride the Ocean to the land of success, writing off its half-billion dollar 2.5 year run for $39m in Virgin Mobile USA stock.
Let's take a look at the last five years in dead American MVNOs. For a graveyard of well over billion dollars, you'd sure think it wasn't so damned shabby.
Amp'd Mobile
Began service: December, 2005
Ended service: July, 2007
Network: Verizon
Amount invested: reportedly $350 - 400m+
Backgrounder: Despite backing by MTV and Universal Music Group (and a ton of VCs), CEO Peter Adderton managed to run this MVNO straight into the ground in little more than a year. It didn't help that the people running Amp'd couldn't get thousands of their "customers" to make good on their bills, strangling what little income the company did have. Way to go. Amp'd's mobile content still lives on, though -- ever catch Little Bush on Comedy Central?
Disney Mobile
Began service: June, 2006
Ended service: December, 2007
Network: Sprint
Amount invested: $150 million (Mobile ESPN and Disney Mobile combined)
Backgrounder: The second half of Disney's dynamic duo of doomed MVNOs, Disney Mobile targeted families looking to hook up their kiddies with phones that could be easily tracked, monitored, and locked down from afar. Unfortunately for Mickey and the gang, the service came online just as virtually every major carrier got hip to the trend and started offering family-friendly features and services of their own. Combine that with a selection of outright dismal phones, and failure in the marketplace was pretty much guaranteed from the very first rendition of "It's A Small World".
Helio
Began service: May, 2006
Ended service: June, 2008
Network: Sprint
Amount invested: $560m+
Backgrounder: Perhaps the only MVNO we saw with a cogent business concept: sell US users all the crazy, über-sophisticated South Korean phones they've been missing out on. Unfortunately, they never fully nailed the phones (which few phones they did sell over the years), skipping an obvious opportunity to sell proper smartphones. And the MySpace mobile / don't-call-it-a-phone marketing didn't really help them win over the power-user set -- nor did the iPhone. Naturally, we're sorriest to see Helio go, but we won't deny that the company had a number of serious, if ultimately preventable flaws.
Mobile ESPN
Began service: November, 2005
Ended service: December, 2006
Network: Sprint
Amount invested: $150 million (Mobile ESPN and Disney Mobile combined)
Backgrounder: It's hard to say what exactly doomed ESPN's foray into the phone game: its first handset's staggering launch price of $499, the anemic selection of devices, or the fact that a sports television network probably has no business trying to offer cellphone service in the first place. Mobile ESPN's claim to fame was a selection of sports-themed media and services for its handsets, offerings that could be added just as easily to... oh, any phone on any carrier. In fact, that's exactly what ESPN has gone on to do, bundling its brand through Verizon's contact stack -- a much less pricey venture, we bet.
Sonopia
Began service: April, 2007
Ended service: April, 2008
Network: Verizon
Amount invested: $21.5+ million
Backgrounder: Sonopia billed itself as an "MVNO of MVNOs," offering small business, organizations, and individuals the opportunity to create their own virtual networks running on Verizon's backbone and get kickbacks for every subscriber they managed to sign up. Problem was, the business model failed somewhere -- let's be honest, it's probably pretty tricky to get people to sign up for an Omnicron Delta Kappa cellphone, especially when a RAZR is the best model offered -- and the company went into hiding in April of this year. As of now, Sonopia's CEO claims that it's waiting out the storm for a market friendler to virtual networks while pursuing some opportunities outside the US, but we think they could be met with considerably more resistance pulling VC cash the second time around.
Voce
Began service: November, 2005
Ended service: February, 2008
Network: AT&T (Cingular)
Amount invested: Unknown
Backgrounder: We don't know what's more memorable about Voce -- that they thought they could get away with reselling AT&T service for hundreds of dollars a month (with a $500 starting fee), or the fact that they double-billed their customers right before totally shutting down their service, call centers, and subscribers' phones completely and totally without warning. If Voce were a person, we'd pin it down and slap it around like a bully.
XE Mobile
Began service: April, 2006
Ended service: December, 2007
Network: AT&T (Cingular)
Amount invested: Unknown
Backgrounder: You know, to this day we still don't really know what the hell XE Mobile was all about. They were supposed to be catering to the college student demographic -- but really, who isn't?
Regional MVNOs worth a mention
Embarq: Shortly after Sprint tapped spin-off Embarq's head Dan Hesse to become its own CEO in early 2008, the decision was made to shutter the wireless service. Not many were surprised.
Qwest: Former Sprint MVNO that, after years of quiet service shuffled out of the wireless space earlier in 2008 after giving up its wireless business to Verizon for a "quadruple-play" offering.
Co-written by Chris Ziegler.
I don't see BOOST Mobile on the list above, is that an MVNO?
Boost Mobile is still around, so they don't yet have a place in the MVNO graveyard.
nope.
They are also not an MVNO any more. They were at one point but Nextel bought them out and now are a part of Sprint.
Boost Mobile in the US was never an MVNO. It was always a solely owned subsidiary of Nextel and then Sprint.
Seems to me they were following the "try, try again" idea.
I dont see JITTERBUG either. I hate those commercials with a passion. i think all they promote is "hey, look at me, im old and out of touch with technology. Hell i can't even make a phone call or see what key im pressin." anyone who uses jitterbug needs to be put away in the cheapest nursing home called "euthanasia" . Although something tells me John McCain uses Jitterbug.
This is a stroll through the graveyard..... Jitterbug and BOOST both still live on to this day..... for now....
That's because Jitterbug is marketed to solely old people, you nimrod.
I hope, when you're crapping your pants and having the gripper someday soon (guess: you're overweight) and you fumble to dial your phone for help, you can't. Perhaps your arthritis is so bad you can't dial a phone with small keys. Perhaps you can't see very well any more. Perhaps your fingers are too fat. If you can't stand those commercials then turn off Matlock, Murder She Wrote, or Wheel of Fortune and go for a jog or something.
Can anyone tell me who's underlying network Jitterbug uses?
The mistake of the FCC or whoever that setup the cell networks was this: No standard spectrum is not a good thing for competition. Sure, there are basically two, with two carriers each, but...no standard network means you can't shop for networks with one phone, meaning wasted devices all over the place.
After 9/11, Homeland Security missed an opportunity to standardize all wireless networks in the name of national security when it comes to communications networks. One standard network would be available to all companies to use. Think the internet and isps instead of old school ma bell. Yes, it was 2003 or 4 before portability made people think this way, but it's not too late to make things right.
Outside of the big brother aspect of this, I think it's where the US needs to be with wireless networks. We need to have one standard for all wireless providers, will cell towers maintained by uncle sam. Big brother would ensure that communication is viable all the time in case of emergency (less land lines). Then any provider can offer service and will more or less be held accountable, since you'll be able to hop providers with the same equipments. We'd also see a larger offering of phones (at higher unlocked prices), and companies would be forced to stop handling us the table scraps of crappy cameras and crippled tech features.
yes, that's why you'll get superior cellphone signal in China almost anywhere: there are only two network operators, and both pour money into infrastructure, so they end up with two parallel networks, both with excellent reception.
Seduced into buying an Ocean as an extra phone for my wife and I at Xmas by the fact that it was on the American Express Wish List. Serice (both phone and customer) was terrible, and the device wasn't anything to write home about. Won't ever do that again.
Kid
I didn't know half of these even existed.
@Illuminated One & Das Boot
Both BOOST Mobile and Jutterbug are still functioning. This article is about MVNO's that are in the graveyard.
Hmmm, is this why Helio didn't charge me an early termination fee when I got 3g my iPhone?
Funny they charged me and when I called to pay what I owed them after getting an iPhone they said it went to collections (really prematurely I might add It had barely been a month after I cancelled) so I called them and they had no record of my information..to this day and this started in march...Lucky for us I guess haha
I will have John from the billing department make sure you pay for that bill.
The problem that all of these guys had is distribution. Even here in NYC there was never much incentive to go down to the Helio store, as nice as it was. Much easier to stick with the usual suspects. Even if they didn't have the innovations of an MVNO (particularly Helio) there is a comfort in knowing that you can find them in every mall.
Of course Apple's changed the game again with the App Store...the creation of a real marketplace for mobile applications means that so much of the functionality promised by branded virtual operators is now available for a download. Hopefully Google, Microsoft and Verizon are coming soon!
The real question to ask is why do MVNOs thrive in places like the UK but not the US? Is it due to a more mature market? The fact that European standardized on GSM?
@Lovin' It
Wow. Way to totally make a good point and then drown it in racism. Most posters wait for other people to negate the validity of their comments.
I don't really feel that MVNO's are really being successful anywhere, not even UK, and not in a way you could say they are doing better than MNO's...
I am not sure that the terms in which they rent infra/termination at al services are mostly fair, the network owner gets the money anyway, and regulators are not enforcing better leasing terms neither better competition.
Maybe future wireless technologies change the landscape a bit
Engadget give away for that Q amp'd edition
or just send it to me directly =P
I remember seeing Voce billboard ads near Long Beach like a year ago in the ad they had a picture of the Prada phone next to a Perl(not the phone but the jewelry). I also remember when my mother walked into Neiman-Marcus one day they try to sell her the service saying it way better than anything you tried and we even had the new motor razr gold(the fashion model when it was new).
MVNO's have thrived in the UK with every supermarket, Virgin, electricity and gas companies, etc. all having a service alongside those provided by the telephone dealers like BT, CarphoneWarehouse etc. There are 5 network providers here but many times that providers. Indeed there are options from some companies to make your own MVNO.
I don't understand why an MVNO business model should fail. All one needs to do is cover the costs of the line rental, advertising and normal business costs and taxes and all else is easy.
And don't forget EasyMobile (www.easymobile.com) or DOT (www.dotmobile.co.uk) :)
How is it that Helio service ended in June? I am still supporting their 3 party apps here at REAL Networks?
How is it that Helio service ended in June? I am still supporting their 3 party apps here at REAL Networks?
What about MCI? I used to have MCI cell phone service! How can we possibly forget about MCI and then MCI Worldcom and then Worldcom and then collapse? They used to get my monthly bills wrong 11 out of 12 months of the year! I think they operated on Sprint's network. I had them in the 2000-2002 timeframe.
I thought mci had their own towers and sprint bought them out?
Is Cricket still bouncing around?
cricket is thriving, but they're not a MVNO. They have their own towers. They just don't have enough, which is why reception sucks outside your home calling area. They do have roaming agreements with verizon though
Cricket is still around but they are not an MVNO they run their own network.
Helio should not be on the list... First off they are still around even if they were absorbed by Virgin Mobile. I think if they went totally under and the phones were paper weights you could include them. The phones still work, so does the network.
helio doesnt have their own towers moron
What about machine-to-machine (m2m) MVNO's? The likes of companies such as KORE Telematics (http://www.koretelematics.com) are flourishing!
There's always TracFone with their uber-locked handsets and GSM service where you can't swap the SIM card from one phone to another. Yet, they're still alive and well. *scratches head*
lol that made me spit out my cup noodles all over the place.
huh. that was supposed to reply to Lovin' It's comment of "I still use Jitterbug to meet old ladies and have sex with them" but the comment system wont let me hit his reply button for some reason. oh well, still lol.
So what MVNO's are actually still around in the USA?
Virgin Mobile? Anyone else?
Kajeet is still around, I really can't imagine they will last much longer...
Kajeet won't last much longer. We just put all their phones on clearance at my Best Buy.
I hated Amp'd.
I never got great service with them (I get better service with Verizon), they over charged me, NEVER sent me my mail in rebates ($200 is alot of money to never receive), and they had really bad customer service.
As the reports of them starting to go under began to roll in, everything got even worse.
I agree that Helio shouldnt be on this list....yes they were bought by Virgin, but as others have pointed out, theyre still in business. You can still go to thier website and sign up for new service. I currently have a Helio Ocean and its still working. I am kind of upset about the buy out by Virgin...The whole thing I liked about Helio when I signed up was they promised cool different phones and the price of the service was unbeatable at the time. I had Verizon for years and the cost of Verizon for the same service was like $30 more per month.When I first got Helio people would always ask about my "phone" and the features were awesome. Now, here we are 15 months later and Helio never fullfilled thier promise. Yes the Ocean was awesome when I got it, but that was over a YEAR ago. Yeah, it still works fine, but thats not the point. The point was to have awesome DIFFERENT phones with the best plans. Now, here I am looking around at all of these new phones wishing I had something better. It seems that all other companies have caught on and each have thier own unlimited plans. Helio uses Sprint service, yet I can now get the SAME service directly from Sprint for LESS $$!! Sprint even gives FREE navigation with that plan! (yeah Helio gives free google maps and it was cool when it came out, but now ALL decent phones seem to have this.) I even get a coroporate discount through work that makes the cost of ANY cell plan cheaper than what I have now. I can even get the new Iphone or the Dare for less per month than my Ocean. I'm seriously considering sucking up the ETF and leaving out of principle. Speaking about ETF, does anyone know a way to get around Helios ETF? I find it interesting that it seems that every company now has Pro-rated ETF's yet I hear no mention about this for Helio. I even recall recently seeing something about Sprint having a lawsuit against them and they had to repay millions in unwarranted ETF's. I have been with Helio for almost a year and a half...why should I have to pay $175? Any ideas?
The method seems to be just cancel it and not worry about it. I'm considering calling up customer service and complaining till they let me go. I'm switching to Sprint and getting an HTC Touch Pro as soon as it comes out. Helio used to be good, but they haven't changed... nothing has changed, plans, phones. It seems like such a horrible waste. Even if I can't get them to let me out, I'm going to deal with the ETF one way or another, I don't want to be with Helio any more.
Being a Sprint MVNO, you would imagine you'd be able to get your hands on the Airave? I can't, Helio never replies to the e-mails about it, and Sprint says to contact Helio. I have horrible cell service at my house and an Airave would make me so much happer with my service, oh well. Too bad, goodbye Helio! It's been a good year, but I'm beginning to regret my choice!
So what are some current MVNO's not owned by wireless companies.
That excludes
Boost owned by Sprint
Tracfone/Net 10 owned by America Movil
Whos left ?
Maybe it's just me, but it seems odd that most of theses failures beyond the the 2 poor billing practices of the 2 at&t ventures were CDMA supported networks... I was under the impression that MVNO's worked quite well in the European market... but I've been wrong before...
And yet Tracfone still lives...
phones by tracfone and their ilk are often used by drug dealers/traffickers. they buy them in multiples, program each others new numbers and then ditch them after a specified time. sometimes called 'burners' because they burn through the minutes quickly, ditch it and buy a new one, anonymously and for cash before the heat comes down. haven't you ever watched 'the wire'? i have a feeling that is the main reason they sell at convenience stores for around 20-30 bucks, they come with minimal airtime and sometimes marketed as disposable. the expense is nothing compared to keeping your voice, dealings, and location off the wires. furthermore, illegal activity is pretty much the only justification for needing a disposable, anonymous cell phone. think, think about it.....