Mobile virtual network operator agreements sprung up on both sides of the Atlantic this morning, with two wireline providers overlooking their former wireless subsidiaries for the partnerships. AT&T Corp. reported a deal with Sprint Corp. to sell AT&T-branded wireless service during the next five years using Sprint PCS’ network. British Telecom announced a similar deal to sell branded wireless service in the United Kingdom through Vodafone U.K.’s network.
AT&T said its non-exclusive deal with Sprint would allow the company to offer wireless services to its bundled offering for its more than 30 million business customers. The carrier also said it would offer its own unique content and applications, operator assistance, 411 information service, customer care, billing and handsets. In addition, AT&T said it has the added benefit of carrying the long distance and international calls made by its wireless customers over its own long-haul network.
“The MVNO model has achieved great success in Europe and is showing promise in the U.S. when executed with the right strategy,” said David Dorman, chairman and chief executive officer of AT&T.
Dorman added that the service is currently being tested in select U.S. markets, and the company hopes to launch the offering, which has yet to be named, later this year. AT&T Wireless Services Inc., which AT&T spun off in 2001 and is being acquired by Cingular Wireless L.L.C., is not expected to keep the AT&T Wireless name though most analysts doubt AT&T would re-use the exact name for fear of confusing customers.
For Sprint PCS, the deal adds another high-profile MVNO, which already include its Virgin Mobile USA L.L.C. prepaid joint venture and Qwest Communications International Inc., to its network, further positioning the carrier as the choice for network partnerships.
“We are delighted that AT&T has expressed their strong vote of confidence in the performance and capabilities of our nationwide CDMA network,” said Len Lauer, president and chief operating officer of Sprint. “We believe this agreement provides substantial positive benefits for both of our companies, and we look forward to serving AT&T’s wireless communications needs.”
BT made a similar push back into the wireless space, announcing a five-year MVNO agreement with Vodafone U.K. that will give the company access to both a wireless voice and data network. BT had been reselling wireless service to business customers through former wireless subsidiary MmO2 plc branded as BT Mobility Services and to consumers through an agreement with T-Mobile.
In addition to the MVNO arrangement, BT is also working with Vodafone U.K. on its fixed mobile convergence activities, including its BluePhone initiative.
“This deal has huge attractions for both organizations,” said Bill Morrow, Vodafone U.K.’s CEO. “As the mobile partner in BT’s convergence strategy, this enables Vodafone to maximize its network and service assets while generating additional revenue from a new source. This deal also reflects the unique dynamics of the U.K. mobile market in which there are five network operators and several MVNOs, all aiming to increase their customer base.”
Financial terms of the contracts were not released.