Veterans are also eligible for the new discounted MVNO
Sprint Nextel Corp. (S) (more specifically, Sprint's Emerging & Wholesale Solutions Unit) has signed a major deal to sell 4G LTE services to a new mobile network, Defense Mobile Corp. (DMC). ?The partnership aims to provide top service and the latest 4G smartphones and tablets to the men and women who serve in or have served in the U.S. military and their families. ?That's a pretty big group -- an estimated 51.6 million Americans. ?The new carrier launches November 11. ?Let's dig into what this means.
I. How DMC Could Become the Nation's Biggest MVNO
In recent years service resellers have been a booming field. ?Many companies and government organizations start their own quasi-companies to buy in bulk and resell at discounted rates services not typically directly offered as a job benefit, i.e. automobile insurance or investment banking. ?The families of active troops or veterans of the U.S. military even get to shop at special department stores that offer goods virtually at cost or below cost.
In the mobile space this trend has been catching on as well. ?So-called mobile virtual network operators (MVNOs) have been popping up, buying services from the giants of the U.S. cellular industry. ?They then turn around and resell this service at cheaper rates as an employee perk.
Despite the explosion in MVNOs, military servicespeople were on their own with relatively few discount options. ?That's about to change, though.
Sprint, which proudly employs 1,500 veterans, explains the latest initiative:
When it launches in 2014, the service will be available to active-duty officers and enlisted personnel of the U.S. military, including those serving or honorably discharged from the Selected Reserve and federally recognized National Guard components of the U.S. Army, Air Force, Navy, Marine Corps and Coast Guard. Cadets/midshipmen at the U.S. service academies and families of active duty U.S military and veterans are also eligible.
With that massive base of potential customers, this MVNO may soon be the nation's largest.
Given Sprint's third place position in the U.S. market, trailing fourth generation wireless LTE network (which only covers about half of Americans), and financial struggles, DMC's decision to select Sprint as its service partner seems a bit puzzling. ?However, DMC is likely leverage Sprint's need for customers and growth to gain more favorable terms.
And digging deeper DMC and Sprint have some deep connections. ?The DMC's co-founder and Executive Director Peter Lurie (not to be confused with the actor/voice-actor of the same name) co-founded Virgin Mobile USA, the upstart pay-as-you-go U.S. wireless provider which at launch in 2002 was the nation's first prepaid only service provider and among the first providers to provide any form of prepaid cell service.
Sprint supported Mr. Lurie's venture from its start, become one of its initial co-owners. ?It partially owned the prepaid brand until 2009 when it bought out partners?Singapore Telecommunications Ltd. (SIN:Z74) and Richard Branson's Virgin Group Ltd., to become sole owner of Virgin Mobile USA.
II. Ready for Prime Time?
DMC seemingly has covered all of its bases:
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Apps
- It will offer exclusive banking apps (via?USAA Bank)
- NFC equipped handsets will have a mobile payments app via a partnership with Mastercard Inc. (MA), complete with rewards
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Other affiliate apps will include apps for?TriCare?(the military?s health services),?the American Military University,?and the?USO?(the United Serrvices Organization, which provides entertainment to active troops)
?
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Domains (DMC owns all of these):
- armymobile.com
- navymobile.com
- airforcemobile.com
- marinesmobile.com
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coastguardmobile.com
?
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Devices/Service
- It will buy text, voice, and data service from Sprint
- It will offer high end smartphones, including
- Galaxy S IV by Samsung Electronics Comp., Ltd. (KSC:005930)
- iPhone 5 by Apple, Inc. (AAPL)
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The "One" by HTC Corp. (TPE:2498)
?
- Giving Back
Again, this offering covers a massive demographic -- nearly one out of every six Americans, or roughly half the number of customers of America's largest subscription carrier, Verizon Wireless (a joint venture between?Vodafone Group Plc (LON:VOD), Verizon Communications Inc. (VZ)).
This venture is potentially a gamechanger for Sprint and servicespeople alike. ?Expect it to make a big splash in Q4 as servicespeople get an MVNO of their own, just in time for the holiday device-buying season.
Source: Defense Mobile Corp.
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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