Well, wonders never cease. As if the MVNO market in the USA was no crowded enough, get set for more. As I wrote back in January about the large MVNOs getting off the ground in 2006, there seems to be no end in site to who and how many will be announced. The latest is Flying J. A number of years ago, when I was back in University in the Eastern part of the USA, I remember seeing lots of these “travel plazas” while taking road trips. It was one of the many places to refuel the car as well as hit the restroom. The place was quite full service, offering truckers a place to take a hot shower, eat a hot meal, even get a haircut. Another reason for all the truckers was because it handled fleet accounts for refueling, not to mention that they were located on all the major interstate highways and junctions. The Flying J Communications group already offers WiFi services, so pre-paid wireless seems like a natural extension. Just one more service that a brick and mortar infrastructure can push that doesn’t take up much shelf space.The true value franchises should be further exploited. Every major grocery, pharmacy and retail chain like Safeway, Target, Walgreens, and Walmart all have tiny sections of their space dedicated to selling plastic pre-paid stored value gift cards. It’s one stop shopping for gifts, ski resorts, beverages, food, entertainment and more. It won’t be long before we’ll see Starbuck’s Wireless and McDonald’s Mobile — Starbucks has already embraced digital goods and serivces by selling music and offering WiFi service; McDonald’s the same with WiFi service. Further motivation will come from the fact that 7-Eleven has already launched, so why not them as well? Lastly, most people don’t even realize that GM is already in the mobile phone service through OnStar. Who knows, are clothing brands next?
In other news, while they have yet to launch, XeroMobile has a completely different concept for their MVNO. Get subscribers to watch adverts on their mobile and in return, reward them with free minutes, texting, and potentially web surfing. On their website, their target audience is college students, who are all about getting free stuff, but I wonder if one of their markets could also be lower income people as well? Remember NetZero and PeoplePC’s original business models? Give away PCs or free Internet service and play the eyeball game. But it can’t last forever. Cingular and Verizon having nearly 100M subscribers between both of them accounts for one-third of the US population and nearly 50% of the total mobile phone market. The only way to begin to gain serious traction is if Americans started carrying multiple devices like Asia (work mobile and personal mobile).The bottom line though is that enterprising Americans know how to slice and dice the demographics and find target markets for their niche. Let’s just hope there are enough niches to go around that are profitable. Unfortunately, if history repeats itself, just like the regional bells are now back together again as AT&T, inevitably, these MVNOs will have to merge to increase profits and gain from economies of scale. What will align the possible divergent subscriber bases will be the synergy of their content and services offering at a price point and branding aligned with the demographics and persona of their users.
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