In the U.S. cell phone market, the key competitive driver is no longer just creative ways to price for talk time. Now, mobile operators are also dialing directly into callers' lifestyles.
Mobile service upstarts ranging from tech-savvy Helio to blue-blooded Voce are tailoring multimedia content and handset features to fit the interests of specific kinds of subscribers. That includes everything from real time video alerts on Major League Baseball games from ESPN Mobile to video clips of drunken fratboy pratfalls from Collegehumor.com, via young-adult oriented Amp'd Mobile.
And by the end of this year, mobile services will debut that offer choices literally from cradle to grave, ranging from Disney Mobile's family features to Jitterbug's simplified offering targeted at older users.
It's all part of a wave of mobile virtual network operators — providers that don't own their own wireless networks, but rather buy airtime at wholesale from major carriers, most notably Sprint Nextel Corp. Jupiter Research keeps an informal list of such MVNOs now launched or in development that presently stands at about two dozen, said research director for wireless and broadband Joe Laszlo.
“But it wouldn't surprise me if there were far more than that — ones flying a little below the radar,” he said.
The question is whether some of these players will crash and burn if their target segments don't pick up the phone.
On the cradle end, Disney Mobile is marketing itself as the first virtual operator in the U.S. to target families with tweens — children older than 10 — and teenagers. The whole idea behind the service, set to launch in June, is to give parents control over the family's mobile communications while giving the kids content and features they want.
No, the handsets don't have ears or a tail. Instead, the service offers parents tools to control when and how their kids use their mobile phones. That includes a Web setup page, where Mom can program 12-year-old Jimmy's phone to not accept or make calls during school hours, while giving 17-year-old Mary the ability to make calls during school hours but only to designated numbers.
Services such as Disney Mobile reflect the fact the wireless phone business has matured to the point where all services won't offer the same features.
“You start out in a very general approach and as the platform evolves, it becomes increasingly difficult to meet everyone's needs,” said Lisa Erickson Roundtree, director of marketing and strategy.
But can you build a mobile business aimed only at families? Erickson Roundtree says Disney thinks so. So far it has invested $130 million into development of Disney Mobile and Mobile ESPN, the sports-related service that launched in February.
At the other end of the subscriber spectrum, Jitterbug is a service aimed at primarily Baby Boomers and older Americans. These are people who just want a voice-oriented phone without the flashy entertainment add-ons, according to Arlene Harris, CEO of GreatCall Inc., the company behind the service.
Jitterbug is set to debut this fall, using network services provided by Verizon Wireless and Sprint Nextel. Harris said GreatCall has deals with both and is now working to finalize those agreements. It also is working to finalize its call plans, with an entry offering of about $9.95 per month.
“The notion is that we are building phones or service for older people, and that's really not our mission,” she said. “Our mission is to build a simpler experience, and if the shoe fits, you can wear it.”
Jitterbug will be aiming for a user interested in practicality over entertainment, and its first two handsets reflect that. Jitterbug Dial features a large numeric keypad, while Jitterbug OneTouch offers a more simplified three-button design, in which users can call numbers on lists, rather than tapping in the numbers by hand.
Jitterbug also will offer a live service representative who can look up numbers and place calls for callers, just as telephone operators once did.
“This is more about assistance, if you need it,” Harris said of the live operators. “Those services are going to start off as being relatively straightforward, like 411 and assisting with calls, and assisting you with updating your handset.”
Jitterbug is not going after a slender niche.
“We have 100 million people who are Boomers and older, and we know from our research that there are lots of people that would like the simpler experience, and we know that marketing is going to be key, here,” she said.
When it comes to a mobile phone targeting older Americans, “it's about time,” Laszlo said. “That is a segment that has not been largely addressed.”
By contrast, it's hard to find “subniches” among tech-savvy 15- to 25-year-olds that “aren't being exploited,'' he said.
NO SHORTAGE OF OPERATORS
Indeed, there appears to be no shortage of virtual operators. In addition to Jupiter's informal list, mobile analysis Web site Takashimobile.com put the count at more than 60, either launched or in planning stages.
While mobile virtual network operators don't have to attract millions of subscribers to support network costs, like mainstream cellular operators do, they need to attract at least a few thousand subscribers to survive, Jupiter estimates.
“It's not like you have to hit a half a million or a million subs, but you do need to get above a threshold in the low six figures that is an economic threshold,” Laszlo said.
Mobile ESPN is now in that gauntlet. After its first two months, the sports content-oriented service has had healthy signup rates, said Manish Jha, senior vice president of Mobile ESPN. The operator will begin to market its service in Sprint Nextel retail outlets starting in July.
ESPN also will join forces with Disney Mobile and retail technology provider BrightPoint to create about 10 dual retail kiosks in shopping malls across the nation in the next few months, with a goal of 100 kiosks by the end of the year.
But Mobile ESPN has made adjustments since its launch, such as cutting the price for its lone handset, from $199 to $99.
“[We] felt that it was important to do it in conjunction with the start of baseball season and in conjunction with the new marketing plan launch,” Jha said.
Mobile ESPN does target the sports fan, but as with seniors, that is no small segment. ESPN's TV channels, Web sites and magazine publications reach 97 million people a week. Its own research indicates more than 88% of Americans consider themselves sports fans, and more than 30% consider themselves avid sports fans.
“It's a large market,” Jha said. But, with virtual operations, “you don't need tens of millions of customers.”
The service is aimed at the sports nut. For example, Mobile ESPN's real time score tracker can display results for events, including the Super Bowl, several seconds ahead of live TV sports feeds that are delayed a few seconds for decency-control purposes.
“At times we were six or seven seconds ahead of the television, and it was just two or three seconds behind the stadium clock,” Jha noted. “And that's an amazing thing — among certain groups of people, that's particularly valuable.”
What matters, though, is what's bankable. And Laszlo points to Jupiter Research surveys that indicate that even content-craving adults age 18 to 24 still rank cellular service coverage and overall voice service as the top two criteria for choosing voice service.
“The idea of content or games was only a decisive factor in only about 1% of even that segment, and I think it is going to be a while before consumers' thinking about mobile evolves so far that all of those data things — all of the media stuff — becomes an important decision factor,” Laszlo said.