Kajeet, Gamma, Euphony is 2008 the year of the MVNO?
Rating: mvno8
In the past week, 3 UK has announced its first MVNO; KPN in the Netherlands has signed an agreement with Euphony to market a new brand Talkout in Spain and now Kajeet has landed USD 10 million.
I understand the continued niche targeting of an MVNO to foreigners like Talkout will be in Spain. There are a number of Brits in Spain and Euphony MVNO might be on to a winner.
I further sort of get 3 jumping on the MVNO bandwagon with Gamma. IP is the future and with Gamma 3 can make sure it has a slice of the action.
But Kajeet. I wish the company success but the company has already had USD 64 million in funding – and now it needs USD 10 million in debt financing. Hmmm. This doesn’t sound healthy. It sounds as though the vision of Kajeet remains but the turn around to a healthy MVNO is tough.
The retail market is essential for the growth and success of an MVNO. Kajeet has retail partnerships with Toys “R” Us but if Disney couldn’t sell mobile to mums in Disney shops – how on earth will Kajeet do it?
But it gets worse. I just looked at the Kajeet site and it seems to be all prepaid. This means no regular income no fixed gains for the MVNO – but a great consumer service. It just doesn’t add up. The only way Kajeet is going to work is if it hits the supermarkets and services are decided at point of sale. Consumers want to leave a shop with a ready to go device and this is possible if Kajeet gets into the supermarket retail market where there is a partnership with a brand. For example, Kajeet kids phone from Walmart.
Agreed, supermarkets have their own MVNO’s but Kajeet needs to push social responsibility. This could be a way in which the MVNO does succeed. Buying a Kajeet phone for a child will not then be about Parental Controls but about social security and neighbourhood watch.
But moving on from Kajeet. It’s been a couple of bad years for MVNO start-ups. Fingers crossed for everyone that the Chinese lucky number 8 is successful for everyone in 2008.
I further sort of get 3 jumping on the MVNO bandwagon with Gamma Telecom. IP is the future and with Gamma 3 can make sure it has a slice of the action.
But Kajeet. I wish the company success but the company has already had USD 64 million in funding – and now it needs USD 10 million in debt financing. Hmmm. This doesn’t sound healthy. It sounds as though the vision of Kajeet remains but the turn around to a healthy MVNO is tough.
The retail market is essential for the growth and success of an MVNO. Kajeet has retail partnerships with Toys “R” Us but if Disney couldn’t sell mobile to mums in Disney shops – how on earth will Kajeet do it?
But it gets worse. I just looked at the Kajeet site and it seems to be all prepaid. This means no regular income no fixed gains for the MVNO – but a great consumer service. It just doesn’t add up. The only way Kajeet is going to work is if it hits the supermarkets and services are decided at point of sale. Consumers want to leave a shop with a ready to go device and this is possible if Kajeet gets into the supermarket retail market where there is a partnership with a brand. For example, Kajeet kids phone from Walmart.
Agreed, supermarkets have their own MVNO’s but Kajeet needs to push social responsibility. This could be a way in which the MVNO does succeed. Buying a Kajeet phone for a child will not then be about Parental Controls but about social security and neighbourhood watch.
But moving on from Kajeet. It’s been a couple of bad years for MVNO start-ups. Fingers crossed for everyone that the Chinese lucky number 8 is successful for everyone in 2008.
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2 Responses to “Kajeet, Gamma, Euphony is 2008 the year of the MVNO?”
Thanks you for your interesting post. I agree that 2008 will be the year of the MVNO – certainly it’s shaping up that way at kajeet. As your post mentions us in some detail, I’d like to share some information on kajeet straight from the source.
Regarding retail, you suggest that we need to secure additional retail outlets. You mentioned that we are in Toys ‘R’ Us. We’re also available nationally in Best Buy, Limited Too, Target and Longs Drugs. Plus, our refill cards are available nationally in CVS and Rite-Aid. That’s a total of approximately 15,000 retail locations, all launched in our first 9 months of commercial operation. One reason Disney Mobile failed to reach customers the way kajeet has is that they couldn’t secure the broad level of retail support that we have.
As to pre-paid vs. post-paid, the successful MVNOs in the U.S. are pre-paid: Virgin Mobile, TracFone, Movida, Boost (a quasi-MVNO). Post-paid MVNOs have not succeeded. There are a number of reasons, I believe, but the problem of receivables, high-CPGA and direct competition with the giants are among them.
Regarding financing, money raised does not necessarily equal money spent. You suggest that our recent $10 million in financing from BlueCrest Capital isn’t healthy. On the contrary, it’s a strong sign of the health of the company. We continue to attract investors in a credit-crunched market because, in the hyper-competitive world of mobile phones, kajeet has a well-conceived business plan, a large and underserved market, and a remarkable team of talented and experienced professionals.
I invite anyone reading this to visit kajeet.com and look at the online press room in the “About Us” section for more details about the exciting developments at kajeet. We’re looking forward to a strong 2008.
Many thanks for sharing your thoughts about us and for allowing me the opportunity to comment on your post.
All the best,
Daniel Neal, CEO & Founder
kajeet Inc.
Comment made on January 11th, 2008 at 7:41 pmI think kajeet would attract even more “tween” parents if they included GPS on their phones for the parents to be able to locate their “tween”. This age group is still very young and parents like having the ability to know where their children are for safety reasons.
Comment made on January 19th, 2008 at 5:02 amLeave a Comment