Sending the Brand Into the Wireless World

MANISH JHA is cheerful about ESPN's loyal viewers.

Skip to next paragraph Viktor Koen

A senior vice president at the sports network, Mr. Jha will tell you that 22 viewers have named their children ESPN - "plus one named Espy," chimes a spokeswoman. He will mention that at games, some fans paint the name of the network on their chests.

Indeed, Mr. Jha can rattle off intimate details of the network's audience, not just its overwhelming maleness (more than 70 percent), but average incomes, Internet surfing habits and probably even preferred snack foods. He knows all this because late last year Mr. Jha introduced Mobile ESPN, a cellphone service aimed squarely at die-hard fans.

The service costs more than regular cellphone plans, to 5 a month, depending on the minutes and the extras, and (a relative bargain) for the Sanyo MVP phone. But every customer gets high-speed over-the-air access to ESPN interviews, analysis and game highlights, full-length ESPN.com articles and GameCast interactive scoreboards of events in progress.

Subscribers can specify their favorite teams and athletes, and the content will be tailored accordingly. There are text-message alerts for pertinent breaking news or game wrap-ups. The phone is grabbing the attention of sports fanatics, especially those who play in fantasy leagues or bet on sporting events.

Mobile ESPN is part of a cluster of new cellphone services that are drawing notice these days. The providers are known as mobile virtual-network operators, or M.V.N.O.'s. They are virtual because rather than put up their own cell towers, they rent space from the three largest nationwide networks. Customers pay the virtual operators directly, and receive customer support from them. Some bear the names of brands like ESPN, Virgin, 7-Eleven and - soon - Disney, while others have newly created identities. They all have specific customers in mind long before they reach the market.

Surprisingly, about 10 percent of American cellphone users will get service from virtual operators this year, according to ABI Research. Among others, TracFone Wireless, Liberty Wireless and 7-Eleven's Speak Out Wireless were developed to provide prepaid cellphone plans. These appeal to people who cannot pass the credit check required by subscription carriers.

"The first wave of M.V.N.O.'s focused on prepaid plans," said Kenneth Hyers, an analyst at ABI Research, a market research company in Oyster Bay, N.Y. "The second wave focuses on high tech."

Now that Verizon Wireless, Sprint Nextel and Cingular Wireless have built high-speed data networks, virtual operators can use the bandwidth to introduce specialized services. Mobile ESPN is just one example.

Amp'd Mobile, which started late last year, offers video downloads intended for older teenagers and people in their 20's, clips from MTV, Spike and College Sports TV, along with "viral" videos from Break.com and iFilm, and live events like Ultimate Fighting Championship.

Operating on the Verizon Wireless high-speed network, Amp'd charges monthly fees of to 9, with or extra for higher tiers of video access. Amp'd even has an over-the-air music download service. Though the track list is limited, its 99-cents-a-song rate is cheaper than the music sold over the air by Sprint or Verizon.

Another high-tech virtual operator is Helio, a joint venture of South Korea's SK Telecom and the Internet service provider EarthLink. Service details are still hazy, but the carrier has unveiled a pair of attractive phones: Pantech's black Hero and the "pearlescent" Kickflip, by VK Mobile. Both have 2.2-inch liquid-crystal-display screens, 2-megapixel cameras and 70 megabytes of internal memory. The Hero has a second processor for improved video and music performance.

Helio also announced it would carry a mobile version of MySpace, the youth networking service. Software will allow members to send messages, add new friends to their profiles, and view blogs and photos optimized for the cellphone screen.

Like the other high-tech virtual operators, Helio will not be cheap. "Helio will never be about rates and minutes or prepaid offerings," said Stuart Redsun, Helio's executive vice president for marketing. Still, he says the target audience of 18- to 34-year-olds is ready to pay for it. "You're going to get the money if it's something you really want."

Virgin Mobile USA, the largest entertainment-oriented virtual operator, is sticking with its prepaid service model for now. Owned by Sprint Nextel and Sir Richard Branson's Virgin Group, Virgin Mobile has attracted more than 3.5 million subscribers in the United States since 2002. After finding that 70 percent of its customers use text messages, Virgin developed a text-messaging device with Kyocera called the Switch_Back. A curvy candy-bar phone that flips open to reveal a qwerty keyboard, the Switch_Back will compete with T-Mobile's popular Sidekick pocket messager.

Boost Mobile, which also began life as an entertainment M.V.N.O., is now wholly owned by Sprint Nextel. Having kept its prepaid pricing structure and developed its hip-hop-focused content, it has nearly two million subscribers.

Not all the new virtual operators aim to engage the youth market. Quite a few, including the recently marketed Movida, hope to attract the Hispanic population in the United States, offering affordable international calling and improved Spanish-language support. A service called GreatCall is meant for older users. Its phone, the Jitterbug, will have an easy-to-read screen, enlarged buttons and a louder, cushioned earphone.

Disney Mobile is geared to parents who want to keep track of their children. With a click, parents can see where their child is located - right on an interactive street map, thanks to built-in G.P.S. and other wireless-location technologies. They can even specify the hours when children will be unable to call or send text messages, so they do their homework, say. The service will begin in June, starting online and at a handful of mall kiosks.

Besides Mobile ESPN, Movida and Virgin Mobile, Sprint Nextel will carry Helio and Disney Mobile. Mobile ESPN will soon even sell handsets in Sprint stores. Though these upstarts could be viewed as competition for Sprint customers, Len Lauer, the Sprint Nextel chief operating officer, says that M.V.N.O.'s have been good for business. Last year the company took in 0 million in wholesale revenue from virtual operators, Mr. Lauer said, adding that the company's profit "on a per-minute basis" is about equal, whether it is a Sprint Nextel customer or a virtual operator customer.

Are M.V.N.O.'s as good for consumers as they are for the carriers?

It will take time before the newest services show up in J. D. Power & Associates' customer-satisfaction surveys, but Kirk Parsons, the company's senior director for wireless services, said that they could face an uphill battle.

"In these cases, customer care is outsourced, and when you outsource, you don't have total control," Mr. Parsons said. He noted that T-Mobile and Verizon Wireless, which rate highly in customer care surveys, run their own departments internally.

Analysts also suggest that virtual operators from established brands have more to lose.

"The flip side of entering with a strong brand is that if you mess up, there's a real cost," said Adam Guy, managing director for wireless at Compete Inc., an online market research firm. "Problems such as billing errors could cripple a new carrier, and people love to hate their wireless service providers."

Mr. Jha says he is ready for the challenge. Mobile ESPN, along with Disney Mobile, will contract its customer service to the Omaha-based West Corporation, but to ensure a positive customer response, Mobile ESPN executives required that West's personnel pass a rigorous "sports knowledge aptitude test."

"And in the unlikely event that people are put on hold," Mr. Jha said, "it's ESPN Radio that is playing."

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