ESPN Mobile's Demise Signals Death Knell for MVNOs

Bad wireless news part two (see the earlier post). On Friday, Disney announced that it's shutting down Mobile ESPN, its MVNO (Mobile Virtual Network Operator) aimed at sports fans. Despite providing innovative and plentiful content, the fledgling boutique carrier couldn't win over many subscribers. And with it, MVNOs—called "wireless partnerships" in this informative article from today's USA Today (a great paper for tech coverage, btw)—have gone from the mobile world's hyped little darling in 2005 to the deadbeat wireless business of 2006.

I tried out the ESPN service over the summer for a piece I wrote on MVNO's in last month's Best Life. The sports features—everything from customizable scroll bar and up-to-the minute scores to fantasy-sports management and a large selection of video clips—were innovative and the envy of all my friends. But beyond the excellent sports content and presentation, Mobile ESPN didn't offer much else. The MVP phone I played around with was simply the Sanyo MM-9000 in athletic clothing. No matter how you dress it, that phone isn't much of a looker and has a lousy speaker. Still, the MM-9000 in its Sprint incarnation has built-in GPS and compelling navigation included—not so with the ESPN version of the phone. If cell phones are like little computers—a comparison many pundits like to make these days—then you'd probably want them to perform more computer-like tasks. ESPN also came out with the Ace, a sports-ified version of the Samsung A900. Just two phones. No wonder sports fans, plenty of whom were probably also early-adopters, stayed away.

I almost feel like it's a conspiracy against the MVNOs: The bigger carriers already rent out network capacity to these poor, well-meaning "wireless partners," but meanwhile the big carriers suddenly get innovative and start offering cool content and cutting-edge apps and services. Just look at the full-length movie and HBO shows offered by Sprint and Cingular, respectively, or the full-fledged music-downloading stores of Verizon Wireless and Sprint. And yet all those carriers are selling network capacity to MVNOs that try, but fail, to offer a comparable breadth of similar services. In areas such as GPS, it's the big carriers that are pushing the envelope.

And it's not just with services—the big carriers are on the bleeding edge with handsets as well: When typically stodgy Verizon starts offering the most buzz-y and stylish phones first (Motorola KRZR), even if they stink (Chocolate, Q), the death knell rings for the content-specific MVNOs.

Some of these hyped, content-driven wireless partnerships are a tough sell, but not all MVNOs are struggling. Virgin Mobile has four million users, but the most sucessful MVNO to date is TracPhone, a prepaid service that offers a super-affordable $99 a year plan. It looks like MVNOs can't offer users much in the way of content and cool phones, but they do offer affordability for those who don't necessarily need to be on the bleeding-edge.

I really love all the next-gen services, MVNO-provided or otherwise, but I keep hearing from a lot of people that don't really care about movies and music and other features on their phones. So I'm curious: Would you rather have a phone that does it all or an affordable phone that just makes phone calls?