Not everyone will make it in the MVNO market

Last year saw a slew of MVNO announcements, from Amp'd Mobile's move to differentiate itself with high-speed data to Liberty Wireless, which is targeting Hispanic consumers. Many MVNOs will launch in 2006, but not all will succeed. While U.S. MVNOs to date have focused on broader markets, such as the prepaid market or the youth "lifestyle" market targeted by Virgin Mobile and Boost, we will see other MVNOs look to copy what is already out there and fail or attempt to segment the market even deeper.

That is a riskier proposition given the fact that virtual carriers will have to acquire customers less expensively to make a return on the investments in their own wireless platforms such as billing, customer care and network switching. Those focused heavily on data and content are required to make some significant investments around unique content and sophisticated marketing. Amp'd Mobile, for instance, made a bold move by matching the price of Apple's iTunes service, selling full songs for 99 cents each, compared with the $2.50 price tag of competitors, and losing approximately 25 cents on each transaction to record labels.

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