RadioShack may be partnering with Cricket provider Leap Wireless (NASDAQ:LEAP) to form a new MVNO dubbed RadioShack Mobile, according to the blog Engadget.
According to the blog, which cited internal screenshots of the new system, the new MVNO will support the HTC One V and other smartphones, including the Huawei Mercury and Pillar. The service is expected to be a no-contract offering with "low monthly rates," though no prices were detailed.
Leap spokesman Greg Lund declined to comment and a RadioShack representative declined to comment as well.
Such a venture would be risky for RadioShack, which sells phones and services from Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T) and Sprint Nextel (NYSE:S). More and more MVNOs have been springing up during the past six to nine months, mostly using Sprint's network. A RadioShack MVNO would need strong brand visibility to take off.
Late last month RadioShack reported a loss of $21 million for the second quarter, compared with a year-earlier profit of $24.9 million. Revenue climbed 1.2 percent year-over-year, with wireless sales up 3.3 percent. Yet the retailer has struggled recently in the face of tough competition from online retailers like Amazon and larger competitors in the brick-and-mortar business, including Walmart.
For Cricket, the MVNO deal would be another potential source of revenue, though it's unclear how many customers would be tempted to sign up given the availability of other prepaid, no-contract options. Leap said earlier this month it would not make its $75 million minimum wholesale purchase commitment of network access from Sprint. Leap reported a net loss of 289,000 customers and a net loss of $41.6 million that was more than analysts expected. The company also plans to narrow its national retail expansion to just 8,000 stores--fewer than its previous expectations.
- see this Engadget post
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