The rush of companies joining the ranks of pseudo-wireless providers continued last week as mobile content and application provider SmartServ Online Inc. announced plans to begin offering its prepaid Uphonia wireless services using a yet-to-be named wireless operator’s network. Unlike a number of companies that have recently launched similar services targeted at customers unwilling or unable to sign up for traditional postpaid services, SmartServ said it plans to differentiate itself using its vast collection of wireless content.
SmartServ Chief Executive Officer Robert Pons said the company is not ready to provide final details of its prepaid service for another couple of weeks, but he expects the offering to be competitive with mobile virtual network operator services offered by Virgin Mobile USA L.L.C. using Sprint PCS’ network and 7-Eleven using Cingular Wireless L.L.C.’s network, as well as traditional prepaid resale provider TracFone Wireless Inc.
“We will be very competitive price-wise,” Pons said.
Pons added that the Uphonia service would take advantage of SmartServ’s recent acquisition of international prepaid calling-card distributor KPCCD Inc. by offering an international prepaid calling-card option as well as KPCCD’s already established distribution channels.
According to the company’s Uphonia Web site, the nationwide service will offer free nationwide long distance, free night and weekend minutes, free voicemail, free caller identification and free call waiting.
In the meantime, SmartServ is offering downloadable content through the Uphonia service, which is compatible with AT&T Wireless Services Inc. and Cingular Wireless L.L.C.’s TDMA and GSM networks, Sprint PCS’ CDMA network and T-Mobile USA Inc.’s GSM network. The company noted that Verizon Wireless and Nextel Communications Inc.’s handsets are not compatible with the content as both carriers do not allow third-party providers to independently supply services.
SmartServ noted the content will be bundled as part of its Uphonia prepaid service, providing customers with access to thousands of ring tones, images and graphics via the company’s Web site or in retail stores using Uphonia kiosks. Customers signing up for the prepaid service also will have access to select free content that SmartServ said would be based on prepaid calling minutes purchased.
“Our plan is to bundle the latest cell phones, low-cost prepaid wireless plans and free mobile content,” Pons explained.
While SmartServ said it was confident the service would find a place in the ever increasingly competitive wireless space, analysts warned that unlike MVNOs and larger resale companies, SmartServ could have a hard time establishing a presence.
“They are going to struggle since they have no brand name cache, which could serve as a gating factor in limiting their success,” said Michael Grossi, principal at industry consulting firm Adventis Corp. “MVNOs like Virgin Mobile and 7-Eleven are well known in broad consumer segments and have been able to take advantage of that presence. Even some of the larger resellers like TracFone have spent years developing their own brand niche.”
Grossi also questioned SmartServ touting its service as an MVNO, noting the increasingly popular label is more suited to companies with an established brand name looking to branch out into the wireless space.
“We expect a number of upstarts will continue jumping on the MVNO bandwagon hoping to garner extra attention in the media,” Grossi said, adding that the dilution of the MVNO label eventually could hurt companies planning to enter the wireless space using the true MVNO business model like Disney and ESPN.
