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September 29, 2006


Michael Mace

Nice article. I'm not sure Mobile ESPN failed because of incompetent management. I think the concept may have been flawed from the start.

Many mobile phones offer sports headlines and scores. The additional content you got from the Mobile ESPN system was interesting, but was it was enough better to justify the cost and hassle of switching operators?

Also, the text on the phone's screen was roughly five points high, making it very hard to read for anyone over 35. It's one thing to do that in a youth phone, but the sports fanatic demographic isn't necessarily young adults -- especially when you factor in the cost of Mobile ESPN's service.

One other thought: It is probably unreasonable to expect any MVNO to take off rapidly in a country where the vast majority of mobile users are on multi-year contracts. Maybe all of these MVNOs are being judged too quickly.

Michael Mace

Paul Jardine

Tomi, I have to agree with you. I hear too many people say that the MVNO model doesn't make money, but, as in this case, it's not that the MVNO model is wrong, it's just piss-poor execution by the company. Maybe it's greed or maybe it is just a complete lack of understanding, but an MVNO isn't going to make money charging premium prices for basic services. It felt like they thought "Hey, let's launch an MVNO and get all our stupid customers to pay through the nose, just cos it's ESPN", rather than thinking about how they could provide a valuable service to their customers.
As a VC once said - it's more important to make something people want, than something that makes money; if enough people want it, you'll make money anyway.
I have a feeling it was their strategic objectives that were missing, substituted by a shallow money-grab that people saw through pretty quickly.

Tomi T Ahonen

Hi Michael and Paul

(Michael, thank you for reposting that comment. We were totally swamped by over 1900 spam entries over the weekend)

Thanks for the comments. I agree Michael, that an MVNO - especially one that targets a mass-market adoption - will need to be given time. For every successful Virgin, there are many of the Easyphones (Stelios, the Easy discount airline also in the UK).

Its not easy, and yes, we need to give them time. But what surprises me is that they were losing money from the start? How massive an organization had been built? Most successful MVNOs that I know run on totally shoestring budgets and minimal staff - often only literally a handful of people.

Paul - totally agree with you. And good insights from your VC friend.

Thanks for writing guys! See you soon again..

Tomi Ahonen :-)

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