Editor's Corner

I received some interesting feedback following my MVNO comments on Monday regarding whether or not the window is closing for major multimedia companies looking to offer high-speed data services. I mentioned that it was unclear as to what extent Cingular will embrace MVNOs on the high-speed data side once it improves its W-CDMA/HSDPA footprint. On this note, Jenny Fielding, COO of Switch-Mobile, a Cingular MVNO, wrote: "We have been promised data capabilities since we started engaging with Cingular in the first quarter of 2005. Each quarter they push the estimated date, and at this point, we are looking at 2007." Switch-Mobile believes data is a competitive differentiator for the company, but for now it has to differentiate itself on the voice side. The MVNO has developed a proprietary international calling application for the mobile phone called the Globe Dialer.

Secondly, it's interesting to note that the newly announced Disney MVNO is not offering EV-DO services via Sprint Nextel, preferring to stick with slower 1xRTT for now. There won't be any mobile TV offerings initially either as Disney believes it will be several years before this is mass market. But you have to believe when the time is right, Disney will have all of its ducks in order since one of its affiliated companies, ESPN, is doing all the heavy lifting, and it will be an easy migration path to high-speed data services on Sprint Nextel's network.

An executive at another MVNO made an observation I hadn't even thought of when it comes to brand dilution issues for Sprint Nextel. Amyn Nanjee, COO of Nexus Mobile, said, "The dilution of the Sprint Nextel brand is not only because of a large number of multimillion-dollar companies offering MVNO services, but in my opinion, primarily due to the vast number of independent reps (IRs) being signed on by MVNEs (mobile virtual network enablers)! Do you think Sprint Nextel will be bold enough to put a cap on how many IRs/resellers an MVNE can facilitate? Since most IRs have the exact same 'cookie cut' plans to offer, very low advertising budgets and multiple IRs in the same market, most choose to compete by offering deeper discounts on refill minutes, cheaper handsets (poorly refurbished), and higher minutes. The failure of an IR will always reflect poorly on Sprint Nextel." - Lynnette

Correction: Yesterday's VC chart had the wrong URL for Icera. The correct address is www.icerasemi.com.

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