LAS VEGAS--T-Mobile US (NYSE:TMUS) MVNO Solavei plans to launch its "phase two" services on Oct. 1, said CEO Ryan Wuerch. He said phase two would include a new compensation scheme, a refined focus on the Hispanic market and new offerings on its Solavei Marketplace program.
Wuerch declined to provide exact details on phase two. He said the new compensation program would be rolled out to current Solavei customers during the next several weeks now and that the company would publicly announce the changes at the beginning of next month.
Although Wuerch declined to provide many details around the company's plans for the Hispanic market, he said that fully 70 percent of the company's new customers last month were Hispanic and Solavei is working to entice additional customers in that demographic. As for the company's Solavei Marketplace, which it launched in September 2013, Wuerch said the company plans to integrate payments and rewards more tightly into the system, and to allow users to easily enter their existing credit cards into the Marketplace in order to more easily receive discounts and rebates.
Solavei launched in 2013 with a $49 per month unlimited voice, text and data plan on T-Mobile's network. The company designed its service as a referral program, rewarding customers with monthly service discounts if they sign up new customers to the service. Wuerch said one of Solavei's customers, a single mom, has signed up so many new customers to the service that not only is her mobile service free, she also makes $300 in commissions per month.
"It's truly making a positive impact in people's lives," Wuerch said.
But Solavei's progress so far has not been without troubles. The company in late May filed for bankruptcy. Wuerch explained that Solavei designed its business to support millions of customers, but as of May 31 it counted only 101,500 customers.
Wuerch said Solavei continues to make progress in its bankruptcy proceeding and expects to emerge from bankruptcy sometime near the end of this year or early next year. By shedding its debt, he said he expects the company to emerge from bankruptcy profitable and with free cash flow.
Wuerch also boasted of Solavei's technology platform, which is designed to encourage customers to sign up their friends and family to the service through social media. He said investors have pumped around $70 million into the company during the past 23 months, and that the company has so far generated $110 million in revenue and has paid out $28 million in commissions to its customers so far. He said the company recently received patents on the technology it has built.
"There was never a straight path to the top," Wuerch said, noting that other companies have used the bankruptcy process to improve their future. "It's never perfect from day one."
Interestingly, Wuerch said that Solavei is considering either moving away from T-Mobile has its network operator partner, or adding another carrier to its network offerings. He said that Solavei remains happy with T-Mobile as a partner, but could introduce a system that would allow customers to choose the network "backbone" they wish to access via Solavei's mobile service. Other MVNOs, most notably Red Pocket Mobile, currently offer that kind of choice.
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