Object lesson in how to run an MVNO
By Annie Turner
Rating: the dangers of received wisdom
Amp’d Mobile is likely to be no more after the end of this month.
At the same time, another MVNO that also targets younger people, Virgin Mobile USA, plans an initial public offering to raise USD 506 million, pending approval from the authorities.
Virgin’s use of pre-pay is one of the reasons that its offering will probably be massively over-subscribed after Amp’d bites the dust, dogged by kids who wouldn’t pay their bills and following a number of other high profile MVNOs that didn’t make it either, including ESPN.
It’s hard to remember that before the success of Virgin, pre-pay was much despised in the US, but now lots of grown-ups like it too as it helps them keep a better grip on their spend and they aren’t bound to annual or longer contracts.
Virgin’s Sugar Mama has been a big contributor too – customers get free voice minutes and text messages in exchange for watching ads – while almost all of the rest of the industry is still talking about it and the much hyped Blyk service (that was to be launched in the UK in June and funded entirely by advertising, so that services were free to 18 to 24 years olds) has failed to materialise.
It’s amazing, but impressive that Richard Branson’s Virgin Group can still teach the likes of Disney (owner of ESPN) and operators a think or two about marketing in the mobile space. It comes down to understanding your market properly, backed up by endless research and refinement rather than relying on received wisdom.
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