Are we seeing the end of MVNO (Mobile Virtual Network Operating) companies? Channel Partners Online believes so. In a recent article they shared why the collapse of Solavei and other companies are happening and will continue to leave the scene:
The MVNO scene in the United States is in the midst of a shakeup, according to reports.
And, frankly, the news doesn’t come as a big shock as the MVNO model – where companies lease network access from a larger wireless operator and then bill, usually without a contract, under their own brands – has come into question. That’s because providers including AT&T, Sprint and T-Mobile now offer their own bottom-dollar, no-contract services with the backing of more financial resources than their smaller rivals.
As a result, the following initiatives have come to an end: RadioShack’s Leap Wireless partnership; Spot Mobile’s and Solavei’s offerings, which ran on the T-Mobile network; and Chit Chat Holdings’ service, which relied on Sprint.
First, Fierce Wireless reported last week that RadioShack has put the kibosh on its no-contract product. The once-formidable retailer launched its prepaid service in 2012 but, contrary to most MVNO arrangements, had Leap provide the billing, not just the access.
That partnership came to end after AT&T earlier
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Solavei Sales Numbers Revealed
by Tina Williams • • 0 Comments
Just a few weeks after filing for Chapter 11 bankruptcy protection, Solavei CEO Ryan Wuerch said that the company is doing better than expected.
“We’re actually doing far better than we anticipated,” he told FierceWireless, estimating that only around 5 percent of the company’s customers know about its bankruptcy filing. “We’ve had very little attrition.”
T-Mobile US (NYSE:TMUS) MVNO Solavei filed for Chapter 11 bankruptcy protection earlier this month, but said it will continue to operate normally while it restructures. The company launched service in the fall of 2012, and anticipates exiting bankruptcy later this year.
Solavei’s bankruptcy filing, obtained by FierceWireless, offers a surprisingly candid view into the MVNO’s business–which is rare, considering most U.S. MVNOs don’t offer much information on their customer numbers and revenues. According to Solavei’s bankruptcy filing, the company was founded in late 2011 around the concept of “social commerce.” Specifically, Solavei pays a $5 referral commission each month for every subscriber a customer personally refers to Solavei, and this monthly commission continues for as long as the referred subscriber remains a Solavei customer.
Under Wuerch’s direction, the company has grown to 51 full-time employees and an annual revenue rate of $65 million. The company has signed up a