Wednesday, May 28, 2008

Even Embarq Quits MVNO Scheme

Disney and ESPN couldn't float it. Helio has sucked hundreds of millions of dollars to get about 300k subs. And now Helio is trying to merge with Virgin Mobile.

Qwest moved off the Sprint network. Not only that but Qwest moved from the MVNO model to the agent model with VZW. (In other words, Qwest gets a commision to sell VZW branded at Qwest Wireless (QWW).

Now the former Sprint United company (you know them as Embarq) is ending its MVNO deal next year.

"Embarq actively marketed cell phone services for over 18 months through a partnership with its former parent company, Sprint Nextel Corp. At the end of December 2007, however, the company discontinued its wireless efforts after capturing only 112,000 customers, well below its initial expectations."
"It was becoming apparent that we couldn't obtain enough wireless customers to make a big difference," Embarq CFO Betts explained, noting that Embarq will continue to develop and promote fixed-mobile convergence (FMC) services, such as unified voicemail, and text-to-voice messaging."

It is harder to resell cellular services than it is to resell UNE-P, which makes me think that with all of the subsidizing of handsets; 2.5G, 3G, 4G build-outs; tower rent; backhaul; marketing; churn; and brick-and-mortar stores, the Baby Bells hide their cellular losses better than a stand-alone company like Sprint-Nextel can.

No comments: