A Virtual Operator With Some Real Issues
Virtual operator Amp'd is going through a rough patch with some of its executives, with several leaving the company and another is locked in a court battle with T-Mobile over a non-compete agreement. Om Malik says it's symptomatic of the MVNO business, and wonders how many virtual operators can actually be supported by the market. Physical operators tend to justify allowing MVNOs on their networks by saying they can better serve markets and demographics physical carriers can't adequately reach -- but are their enough hip 18- to 30-year-olds to support three MVNOs, and will their content differentiate them enough? Things become increasingly murky when MVNOs do well, and the physical operators decide they're leaving money on the table, and either redouble their own efforts to go after the target market, or just buy out the MVNO. There's no question that MVNOs can succeed, but with more and more popping up every day (and going after increasingly esoteric demographics), it's a real question of just how many of them will be successful. It's also amusing that mobile operators have been buying each other for a couple years, saying there's too much competition for subscribers, but are now empowering more competition by selling wholesale airtime to all these MVNOs.
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