Few wireless companies have been able to target the often sought-after youth market like Boost Mobile L.L.C. Despite being owned by business-focused Nextel Communications Inc. and being available only in a pair of states, Boost managed to sign up more than 250,000 prepaid customers in a little more than a year of operations targeting the finicky and often-maligned Generation Y market.
A key reason for Boost’s success in the 18- to 24-year-old age group has been attributed to Peter Adderton, its former president and chief executive officer, who founded the Boost brand in his native Australia in 2000 before partnering with Nextel in 2002 to bring the “lifestyle-based telecommunications company” to the United States.
To help foster a more hip face for Nextel’s traditionally stoic reputation, Boost sponsored extreme sporting events and athletes, used eccentric commercials with skateboarding grandparents and signed content deals with active, lifestyle-based companies like Roxy and QuickSilver. The moves appeared successful because in addition to its customer growth success, industry analysts often reference Boost as a template for expanding wireless services to underpenetrated markets.
But, just more than a year after Boost was launched and following Nextel’s complete financial takeover of the company last year, Adderton left the venture unexpectedly Nov. 24, claiming Boost was being controlled too tightly by Nextel and the company was losing its focus.
“Every day, Nextel reins us in a little more and makes us increasingly corporate,” Adderton said in a statement following his leaving Boost Mobile. “That’s completely incompatible with what we’re trying to accomplish.”
With little time to wonder what might have been, Adderton said he is set to jump back into the wireless industry and into what he claims was his ultimate goal for Boost-aggregating youth-oriented content that can help carriers realize the value of their networks.
“I hope to make an announcement soon on a company that we are structuring that will allow us to really own the youth content side of the business, including gaming, wallpaper, ring tones and video streams,” said Adderton. “That’s a market I really wanted to take Boost, and when we first set up the business in Australia that is what we wanted to do. But I found out that no carrier would really allow you to talk directly to the consumer. Now that has all changed.”
Adderton, who did not want to discuss his parting from Nextel’s Boost operations, noted the changes include carriers wanting to garner more control over what is passed through their networks in an attempt to ward off the dreaded “dumb-pipe” stigma where operators lose their identities to content providers. Adderton likened the new venture, which would likely not include the Boost name because Nextel owns the rights in the United States, to Virgin Mobile USA L.L.C.’s mobile virtual network operator partnership with Sprint PCS, in which both parties are financially invested in targeting the youth market.
“We will be like a content MVNO,” Adderton explained. “We are taking what the carriers are not sure of at the moment and allowing them to be part of the value chain.”
Unlike competing content aggregators, Adderton said his new venture, which he hopes to launch this month, will include only youth-oriented content, and traditional content will not be welcome.
“We will only have youth content under our brand. You won’t be able to look up Bloomberg or CNN. It will be just purely targeted to youth,” Adderton said, adding that content that fails to hit the target audience will be dropped.
“If the content is not hitting that target, we will get rid of it,” Adderton said.
The new venture is also expected to differentiate itself by marketing the content and brand name to consumers as well as to potential carrier partners, which Adderton noted is important to build brand equity.
“We want kids to call their carriers and tell them they want our content,” Adderton said.
Adderton also showed no lingering ill will toward his former partners at Nextel, and of course not wanting to alienate a potential customer, noted his new venture would be a perfect match to provide content for Boost.
“Boost could definitely use our service,” Adderton added.
