easyMobile has shut up shop
. I’m running a book when the UK & German Operations will close – you only get even money for a date this year.MVNOs
are not for the faint hearted as companies tend to jump into the market before they really understand how to climb the huge walls surrounding the cellular industry. These walls basically are: termination fees and the power of on-net traffic; customer acquisition costs; and economies of scale in back-office billing & customer care. I feel that little credit has been given to the success of Virgin Mobile in the UK to the contract negotiators, especially in the area of in-bound traffic fees. Also, at around the time that Virgin was pilling on the subscribers the MNOs were not particularly focussed on the pre-paid segment and more especially were quite happy for Virgin Mobile to undercut their prices.
However, the story today is rather different in Germany with e-plus targeting in the no frills market and have moved the ultra-competitive south African, Stan Miller, to lead the charge to recapture German market share. In the UK, Carphone Warehouse for some bizarre reason decided to join the kamikaze antics of easyMobile and the various operators are anyway much keener on pre-paid market pricing and segmentation.
However, the European financing is peanuts compared to the type of money that MVNO start-ups in the USA have attracted, especially Helio and amp’d. These have a completely different focus and are targeting high-end, heavy data users. Again, I think they are doomed for failure, but it will take longer seeing the stakes are much higher than in Europe. I’m sure the amp’d user interface design team who have burnt through millions of dollars will be crying over their cornflakes as they read that Verizon score higher in usability tests.All told, I think the story for MVNOs going forward will be one of broken dreams in 2006 and 2007…