Mobile Networks Targeting Direct, Indirect Sales

By Joseph Palenchar -- TWICE, 7/19/2005

New York – Cellular carriers are consolidating, but retailers will have as many or more wireless service brands to offer as they did in the pre-consolidation days if multiple MVNOs (Mobile Virtual Network Operators) launch their own branded services as planned.

Amp’d Mobile of Alisa Viejo, Calif., for example, will launch its multimedia service and phones on November 15 through its own Web site and possibly on other Web sites, but one to two quarters later, it will offer its service through selected brick-and-mortar retailers, said chief marketing officer Dan McGuire. The company is also considering Amp’d-branded stores, although they might not be owned and operated by Amp’d, said the former Leap and Kyocera executive.

Disney Mobile’s family-oriented service, slated for a 2006 launch, will also target indirect channels. “Our goal is to distribute across multiple channels where families shop for phones,” a spokeswoman said. Distribution will be broader than just Disney stores, she added.

As previously reported, MVNO SK EarthLink plans to leverage some of EarthLink’s existing retail distribution to market phones and services, which the company plans to launch in early 2006. EarthLink will also sell the new phones and services online.

As for Chicago’s Firefly Mobile, although not an MVNO in the classic sense, it has begun marketing its phone for 8- to 12-year-olds and its Firefly-branded prepaid service through Target. Firefly is also considering additional retail accounts. The prepaid service is also offered through the company’s Web site and through small regional carriers, which offer the Firefly phone with prepaid and postpaid services under their own names, a FireFly spokeswoman said.

Firefly’s five-button phone is a voice-only 850/1900MHz GSM phone operating on Cingular’s network. It’s shaped to fit in a kid’s hand and lights up like a firefly when in use, when calls are received and intermittently when in standby mode.

Parents use a PIN to program up to 22 outgoing numbers into the 2-ounce phone, including speed-dial keys for Mom and Dad. The phone can also be programmed to receive calls only from select phone numbers. A 911 emergency button features protection against accidental calls.

The Firefly phone is available nationwide at www.fireflymobile.com for $99.95, including 30-minutes of Firefly Mobile prepaid airtime. In July, the phone and Firefly-brand prepaid service became available through Target stores nationwide.

For its part, Amp’d Mobile is targeting 18- to 24-year-olds buying their second or third phone “and ready to do more than just talk,” said McGuire. “They’re ready for convergence.” The company will use an existing carrier’s CDMA 1x EV-DO network to deliver video at 30 frames per second to handsets that will double as camera/camcorders, feature MP3 players with stereo speakers, and offer push-to-talk service. The phones will play back music downloaded by PC from authorized Windows Media Audio (WMA) download sites, and they’ll play subscription-based WMA downloads. They’ll also play back MP3 files transferred from a PC and AAC+ files downloaded over the air.

Amp’d service, which won’t use Sprint’s network, will offer streaming or downloadable audio and video content, including TV and movie clips. It is building a studio in Los Angeles to edit branded content for playback on small screens, and it will build broadcast vehicles that will travel to events to record video from the events or stream the event live to handsets.

Amp’d will launch initially through its own Web site, McGuire explained, because “you can’t launch a complex product at brick-and-mortar retailers.” Retail salespeople, he said “can’t explain TiVo or Amp’d in 30 seconds.”

The company’s launch phones will include the Kyocera-made Angel and Raven phones, retailing at $100 to $129, both with VGA camera and BREW 3.1 software to download applications and games. Launch phones will also include a1.3-megapixel camera phone with BREW 3.1 at $160 to $180.

All launch phones ship with included TransFlash (Micro SD) memory card, either with 256MB or 512MB capacity. Also available will be 1GB cards.

Each phone will contain a proprietary Amp’d user interface that lets subscribers pick multiple types of content by artist name or by network brand. After a subscriber selects an artist or personality, the phone will present selections in the TV, music, movie, sports, ringtone, wallpaper and game categories. Subscribers will also select content by TV-network brand, such as Comedy Central.

Service will be available in prepaid and postpaid form.

Downloadable and streaming video will be offered at launch, as will downloadable audio, but not streaming audio. The company will launch with one or more music labels with over-the-air rights-protected AAC+ music downloads to the handset. The downloads will be sold a la carte at $1 each, which includes a WMA download to the user’s PC.

Amp’d has inked 175 deals with content providers for audio and video streaming and other services, including location-based services.

On-line ads will start in August, and broadcast-TV ads will begin in November. Print ads are also planned.

SK-EarthLink also promises a multimedia service targeted to 18- to 30-year-olds. The postpaid EV-DO service will focus heavily on data applications such as music, video, gaming and location-based services. The joint venture between EarthLink and Korea’s SK Telecom will leverage SK’s experience operating a cellular network that offers satellite-video, music on demand, and video on demand in Korea. The company will also leverage Earthlink’s ISP and Wi-Fi hot spot experience, enabling the company to offer what it calls “the first user-friendly, Wi-Fi-enabled mobile phone in the U.S. next year.”

The joint venture “can combine new technologies, such as Wi-Fi and satellite, with cellular to deliver great phone service along with compelling data applications that our target consumers have been craving,” a spokeswoman said.