The mobile virtual network operator market welcomed back one of its early members last week as former Boost Mobile L.L.C. executive Peter Adderton announced plans for Amp’d Mobile Inc., a venture set to launch later this year.
Adderton’s non-compete clause with Nextel Communications Inc, which bought Boost in late 2003, has expired.
Beyond targeting the same youth market segment and boasting a number of key executives from Boost’s pre-Nextel era, the differences between Boost and Amp’d are as extreme as the market they hope to penetrate.
While Boost relies on Nextel’s iDEN network and highly regarded push-to-talk capabilities, Amp’d will use Verizon Wireless’ CDMA2000 1x EV-DO network, which will allow access to more robust data applications and streaming content.
Adderton noted that Verizon Wireless’ strong network commitment, as well as its leadership position in offering EV-DO services in the United States, made the partnership a natural fit.
“One thing I’ve learned in my years running MVNOs is your carrier choice is critical to your success,” Adderton explained. “Bringing together our decades of youth marketing, branding and entertainment expertise with their superior network will give us the head start we need to succeed in this very competitive market.”
Verizon Wireless’ investment in Amp’d was not revealed, though Amp’d said it would release additional information on the partnership closer to the service launch. The partnership is Verizon Wireless’ first publicly announced MVNO partnership and is seen by many as a competitive response to Virgin Mobile USA L.L.C.’s success targeting the youth market using Sprint Corp.’s wireless network.
Amp’d said its service would offer a mix of prepaid and postpaid services as well as a large selection of wireless data content targeting the 18- to 35-year-old mobile user. Adderton noted Amp’d would use the EV-DO network’s capabilities to offer high quality content as well as utilize mobile production vehicles that will provide streaming content from youth-oriented events across the country. Those digital feeds will be sent to a central studio in Southern California where it will be edited and beamed out to consumers.
“Our customers will be heavy data users and we will provide the content that will draw their attention,” Adderton said.
Amp’d also plans to include PTT capabilities in its offering, though the supplier of that platform has yet to be announced. Verizon Wireless recently upgraded its Motorola Inc. supplied PTT service platform to provide faster response times, but analysts noted the service still trails Nextel’s iDEN platform in overall performance.
Paul Saleh, Nextel executive vice president and chief financial officer, noted that Boost customers were averaging 400 minutes per month of usage with more than half using the company’s PTT offering. Boost charges customers $1.50 per day for unlimited PTT calls.
Adderton also claimed that Amp’d would not shy away from adult content, noting that the company would offer several safeguards to keep such content from children, but that if a customer was of legal age, there would be a selection of adult content available. Most wireless operators stayed away from such offerings, though analysts note the vast monetary potential that could come from such offerings.
Amp’d is also taking an aggressive approach to its handset offerings with specially designed EV-DO capable models that will include Qualcomm Inc.’s latest BREW technology, sliding form factors, MP3 players, expansion memory capabilities and video/picture-taking capabilities. Kyocera Corp. is set to supply an entry-level model priced at $100, which is expected to account for more than half of sales, with Motorola supplying a higher-end model.
Handsets and service will be available through select retail outlets as well as through the company’s Web site, which will allow users to customize their handsets before they get them. Once a consumer receives the handset, all of their selected content will be streamed to the handset once its turned on using Over-The-Air technology.
Adderton noted the online experience will prove compelling as customers will be able to pick what they want and not be saddled with preloaded content designed for the mass market.
“We are not going to give a customer Tetris if they don’t want it,” Adderton said.
The OTA activation will also enable users to update their handset content from the Web site or if a handset is lost to re-send their content selection to a new handset.
Pricing for the service has not been released, but Amp’d said the service would be competitive with existing offerings targeting the youth market.
The Amp’d service is scheduled to launch during the third quarter of this year, but the exact extent of that launch is not known. Amp’d is relying heavily on the capabilities of Verizon Wireless’ EV-DO network, but today the network only covers 32 markets across the country and is set to cover just over half the population by the end of the year. An Amp’d spokeswoman said the company planned to offer service nationwide, but would not comment on whether that meant it would rely on slower-speed 1x services in some markets.
Adderton also noted that while the Amp’d brand is as unknown, as Boost was in the beginning, the anonymity will allow Amp’d more freedom. Boost Mobile was able to sign up several hundred thousand customers during its first year despite being limited to California and Nevada, and now boasts more than 1.2 million customers with a nationwide presence on Nextel’s network.
“Strong brand names are worse for an MVNO as people already have an idea of what you are supposed to offer,” Adderton said. “Amp’d will not be pigeonholed with preconceived notions.”
