US MVNOs Fail To Capture Market Imagination. Disney Likely to Succeed Where Helio Will Fail

Strategy Analytics: the US Mobile Virtual Network Operator (MVNO) market which indicates that the majority of the virtual networks launched with such fanfare earlier over the past two years, will fail to make an impact on the marketplace.

MVNOs, such as Helio and Mobile ESPN, have not lived up to their marketing hype. Despite promising to shake up the market, they have only attracted miniscule customer numbers. In contrast, less glamorous MVNOs, Tracfone, Virgin, and Boost, aimed at the prepaid and youth market, have carved out a comfortable niche, which the trendy, high-tech newcomers can only enviously ogle.

The new wave of MVNOs has failed to learn lessons from its predecessors. The handsets are boring, pricing uninspired and the distribution strategy is flawed. This is a three-fold recipe for failure.

At the end of 2005, Tracfone, Virgin and Boost accounted for 65 percent of the US MVNO market.

US Reseller/MVNO Share, end 2005

Most MVNOs seem to have forgotten to recognize the digital youth segment's preference for prepaid service when planning these product, promotion and distribution strategies. US Mobile Virtual Network Operator (MVNO) Publ 20060809

58 Million Households will be Served by IMS Platforms by 2010

Cambridge, MA, August 17, 2006—Two thirds of the world’s total VoIP households or 58 million in total, will be served by IMS platforms by 2010 states Pyramid Research’s latest report,

The majority of initial FMC rollouts are expected to be delivered with UMA and without IMS, states Svetlana Issaeva, the report’s author. However, several alternative carriers—for example, Softbank in Japan—are planning to deliver FMC via IMS from the start.

Issaeva states that carrier service migration strategies will determine the short- and long-term adoption and revenue potential of IMS-based services. The report found that several IMS migration options are emerging, depending on the type of carrier and geographic location. Carriers and vendors agree that it will take at least another 24 months before all required pieces of IMS architecture are in place and full IMS services are ready to be delivered. Pyramid anticipates that incumbent telcos in developed markets will start migrating their VOIP subscribers to SIP and IMS platforms no earlier than 2008.

The report concluded that Europe will lead the way in the adoption of SIP voice over IMS, with 35 million subscribers in 2010. IMS trials are most advanced in Europe where the first IMS applications, such as video sharing, are already under commercialization. Most European incumbent operators also have plans to launch FMC services as they fight subscriber and traffic losses to web companies, altnets and MSOs. IMS will be deployed in emerging markets as well, where a combination of WiMAX, EDGE and CDMA1x networks will be used to deliver future SIP services.

Transforming Telcos with IMS: The Telco Silver Bullet for an Applications-Centric world. Publ 20060817