SAN FRANCISCO-Several highly anticipated mobile virtual network operators last week revealed plans to begin rolling out services in time for the upcoming holiday shopping season.
One of the biggest names in the burgeoning space, ESPN Inc., said it plans to begin offering its sports-themed mobile service later this year, with plans for its national launch set for early February. The company, which will use Sprint Nextel Corp.’s CDMA network, also changed the name of its mobile venture from ESPN Mobile to the more active Mobile ESPN brand.
In support of the launch, Mobile ESPN unveiled its preliminary handset offering in the form of the Sanyo Electric Co. Ltd. MVP device. The handset is similar to Sprint Nextel’s Sanyo 5600 model, but includes several enhancements, including support for the carrier’s growing CDMA2000 1x EV-DO network and a customer interface designed to highlight ESPN’s sports roots. The MVP also includes a 1.3-megapixel camera with flash, built-in MP3 player and removeable memory-card expansion slot that will ship with a 16-megabyte transflash media card.
The handset also features a large button on the side that Sprint Nextel uses on the 5600 for its Ready Link push-to-talk service, though Manish Jha, ESPN senior vice president and general manager, said the company initially does not plan to support the PTT service.
Jha said Mobile ESPN already has begun taking preliminary inquiry orders for the handset on its mobileespn.com Web site, with plans to begin shipping devices before the holiday season. The brand’s nationwide launch is set for the Feb. 5 Super Bowl that will be broadcast by ESPN parent company ABC.
While it currently may lack the name presence of Mobile ESPN, Amp’d Mobile Inc. said it’s also on track for a pre-holiday service launch of its MVNO service that will target the increasingly attractive youth/young adult market and rely heavily on Verizon Wireless’ rapidly expanding EV-DO network.
The company, which was founded by former executives at Boost Mobile L.L.C., said it will begin offering services during the fourth quarter with plans to begin an extensive advertising and brand-building campaign ahead of the actual service launch during the first week of November. Don McGuire, Amp’d chief marketing officer, said the company will spend between $45 million and $50 million on the campaign, which will take a “dark, Six Feet Under” approach.
McGuire did not release subscriber forecasts for the new MVNO, but said Amp’d needed to generate $180 million in revenue per year to break even, and it expects to post average-revenue-per-user results in the mid-$50 range. McGuire added that unlike some MVNOs that were hatched by larger companies or sprung from carrier partners, Amp’d is totally venture-capital funded and will look to provide a return for its investors.
To hit those revenue numbers, Amp’d said it initially will offer postpaid rate plans that include competitive voice pricing and tiered data rates that mimic what is offered by the cable TV industry. That model will include a basic package that likely will be included in a bundle and can be augmented with extra-cost premium content.
“Pricing is something we have to nail from a simplicity standpoint,” McGuire said. “We have done a lot of research on how people want to pay for service and found the cable model is very popular. We want to package everything on the base plan so that they still have money left over to buy the premium content.”
Amp’d said it likely would add a prepaid option soon after launch that will use what McGuire said would be similar to hybrid plans.
Amp’d also is hoping its distribution model will lead to increased margins.
The carrier previously said it planned to rely heavily on sales through its Web site-bolstered by a recent agreement with Brightpoint-that will allow subscribers to customize their handsets online and have the content downloaded over the air when they activate the devices. McGuire said the company also is working on more traditional distribution deals with retailers interested in its plans to provide lower upfront commissions in exchange for more long-term residuals.
“We think the model will be very beneficial for us, though it might come back and bite us in the ass in year five,” McGuire said.
Amp’d also continued to praise its network partner Verizon Wireless, which aggressively has expanded its EV-DO network during the past several months to more than 60 markets covering half of the country’s population.
“It’s good to have a partner with such an extensive EV-DO footprint, but also with industry-leading customer retention levels that are testaments to its network quality,” McGuire said.
