Will the new breed of MVNOs go big or go bust?


The mobile virtual network operator segment is enjoying new life, with fledgling MVNOs launching nearly every week. But unlike the MVNO craze of the 2005-2006 era--highlighted by high-profile failures like ESPN Mobile, Disney Mobile, Amp'd Mobile and Helio--analysts believe that today's upstarts have a greater chance of success thanks to operator support ranging from customer service to billing and even device procurement.

"Carriers are making the offerings more competitive, they have opened up the networks," said Weston Henderek, principal analyst for wireless services at Current Analysis. "In the past, an MVNO had to drive a certain level of volume to make it. It was an expensive and very big undertaking."

Operators are hungry for these MVNO partners, particularly the smaller Tier 1 operators such as Sprint (NYSE:S) and T-Mobile US (NYSE:TMUS), because MVNOs can help them to grow their market share. Matt Carter, president of Sprint wholesale and emerging solutions, said MVNOs offer a good economic return for the company. "It's a good strategic play for us," Carter said in an interview. "It's another army to help us garner more subscribers on the network." Special Report