Helio’s wholesale MVNO provider, Sprint, yesterday joined the unlimited wireless bandwagon and came out with their own $99.99 plan called “Simply Everything”. Unlike AT&T and Verizon, this plan includes unlimited data, text, Web, email, GPS navigation, and their own brand of mobile music and TV.
Wasn’t that one of Helio’s main points of differentiation, “unlimited” wireless plans? So now that AT&T, Verizon, and T-Mobile all offer unlimited voice plans, and now Sprint (Helio’s partner/provider) offers unlimited voice and data, where does that leave Helio?
This is one of the problems with the wireless industry and MVNO. The industry has not segmented and is still too vertically integrated. Unlike other industries where there are companies that specialize in retail and other companies that focus on wholesale – in the wireless business it’s the same company. Your wholesale provider is also your retail competitor. That’s too much of a conflict of interest and can never work. If there ever were a break out operator that decided to focus on wholesale, say like how UUNET did with Internet, I think we’d see a tremendous and diverse competitive landscape with lots of wonderful choices for consumers (and that wholesale-focused company would make lots of $$$) – but nobody has the guts to do that and walk away from the vertically integrated model, so we are left with a “false” wholesale MVNO model that can never work. Sprint probably should have done this five years ago and by now they would be cleaning up, instead of reporting a $29 billion fourth-quarter loss.
this year and over the next couple of years ICO, terrestar, and MSV will all be rolloinf out hybrid satellite/cellular networks. i have a feeling these arte going to turn out to be more cellular than satellite. the whole satellite phone industry is a bit of a failure beyond vertical markets. but the next generation of phone will be the size and weight of cellular devices.
so why is tjis significant. at least two of the three enities above plan to operate on a ‘wholesale’ model selling network capicty to other who will handle the retail end. all three of the above companies are planning 4G networks.
they may all end up in bankruptcy. but the satellite are under construction and likely to be launched. i would keep an eye on these three companies as cataysts toward a wholesale voice/data network model. although i do expect that they will be focused on government, industrial, and vertical markets initially. but a connection with a consumer based retail partner is not at all out of the question.
David: I agree that a true wholesale wireless provider (I called it "naked carrier" in a recent blog post) could be a successful. Focus on the infrastructure and let a bunch MVNO’s battle it out on the marketing front.
I remember when you and I walked by the Helio retail outlet in Palo Alto: Empty. (Meanwhile a few doors down, the Apple store was lively.) That was a telling moment.
Tom: I’m skeptical of satellite based phone/data service because of the latency factor. And I can’t put much stock in anyone saying their "planning a 4G network" given that no one has defined what that means.
Shai: the thing that these are hybrid satellite/terrestrial networks. the device do not ever have to connect to the satellite; but it will be there for an emergency. what makes it interesting is that these companies got prime spectrum at rock bottom price by purchasing ‘satellite’ spectrum and than applying for permision to reuse the saem frequencies on the ground for there hybrid networks.
i aggree that there is no future in mass market devices that communicate via satellite. but that may end up just be a technicallity for these services.