Who is your wireless carrier?
A question that used to be answered easily is becoming more complicated as mobile virtual network operators gain traction in today’s market. It’s good to be an MVNO as Virgin Mobile USA is showing, signing up more than 1 million U.S. subscribers. With no pesky need to spend billions of dollars on network buildouts, MVNOs can concentrate on good branding, easy customer service and a nice niche for added revenue-all building on an already-famous brand name.
Wireless prognosticators have said Disney, America Online and Wal-Mart plan to get into the MVNO business. They’d better hurry: the MVNO market is getting crowded-depending on how you define the business. Sprint counts Qwest Communications, AT&T Corp. and Virgin as MVNOs. Cingular has 7-Eleven.
The MVNO model blurs some conventional wisdom in a number of cases. Consider this: AT&T Corp., the long-distance company, is going to sell MVNO service to business customers using Sprint Corp.’s (the long-distance carrier, i.e., AT&T’s competitor) PCS network. Meanwhile, once Cingular’s merger with AT&T Wireless Services Inc. (totally separate company from AT&T Corp.) is completed, Cingular can use the AT&T Wireless name for up to six months-in an attempt NOT to confuse customers.
On a side note, AT&T Corp. warned AT&T Wireless Services Inc. that AWS may be violating some aspects of the agreement that allows AWS to use the AT&T brand name. Obviously, AT&T Corp. does not want AWS to do anything to sully the respected AT&T brand name for wireless.
When a friend tells me she plans to drop her Qwest wireless service in Denver because the coverage is bad, I’m not sure what she means. Is she still on Qwest’s network or has she already been moved to Sprint’s network? Qwest is in the process of moving customers from its own network to Sprint’s as part of its MVNO plans. Because Qwest is selling its Denver network infrastructure and spectrum to Verizon Wireless, if she churns to Verizon, she could end up using some of the same network and spectrum she used earlier as a Qwest customer. That’s ironic.
Or she could move to AT&T Wireless, which eventually should be owned by Cingular, but in the short term would use the AT&T Wireless name. But she won’t be able to get service from AT&T Corp., because it only plans to sell to business customers.
Now I see why T-Mobile USA is adding so many subscribers.
