Virtual networks go after high-end mobile customers

The San Francisco Chronicle writes about the battle brewing in the upper end of the mobile market as MVNOs enter the scene targeting the high-end with there handsets and services. The article looks at the growing number of MVNOs joining the scene and trying to make a go at niche markets such as Mobile ESPN for sports fans; Disney for kids; Amp'd for young people; and Helio.

Marina Amoroso at Yankee Group said, "The carriers are realizing to get the last customers they need to offer more than just a mass approach. The companies offer everything, but it's not customized to really penetrate the rest of the market." She noted the virtual networks are using an approach similar to that used by cable TV companies to "reach out and tap a group of people ignored or underserved by wireless."

Amoroso predicted the market, "with about three dozen established or soon-to-be started companies, will grow to 29 million in 2010 and about $10.7 billion in revenue." On the subject of the high cost of new customer acquisitions, Michael King at Gartner said, "It's definitely going to be harder than it sounds to acquire millions of users in the U.S.. It's going to be a lot of work, and you can't make light of that."

On what it will take for MVNOs to succeed, King added, "It's going to completely depend on the operator's ability to set expectations and then really provide a branded service that isn't just brand name on a phone."