Sprint cools its MVNO jets

LAS VEGAS--With Disney Mobile likely to announce its launch plans today at the Wireless 2006 trade show here, analysts are beginning to wonder how many mobile virtual network operators are too many for Sprint to support.

Sprint will be the wholsale network operator behnd the Disney MVNO, and also already has helped launch Mobile ESPN earlier this year. In addition, the committed MVNO supporter provides minutes to Movida, Virgin Mobile through a U.S. joint venture, the major U.S. cable companies and others.

Responding to questions from analysts about where Sprint's fill-line for MVNOs is drawn, Chief Operating Officer Len Lauer said the company is reaching it. "We feel good about the number of MVNOs that we have, and I would not set the expectation for us to have too many more," he said. "Our strategy is not to enable lots and lots of MVNOs and hurt our brand, but it is a multi-brand strategy. We have turned down a lot of companies already."

Lauer added that the mobile industry shouldn't pressure even the big MVNOs for immediate success. "We're really eager to see how postpaid MVNOs perform because many of them have been prepaid thus far, but you really have to give them at least three or four quarters to get their performance and distribution in line," he said.

Bob Egan, service director for emerging technologies at TowerGroup, said the MVNO strategy remains a great way for Sprint to sell large amounts of minutes on its network and pay down debt, and that "the affinity play" that MVNOs count on seems to be working for most of them. Still, "MVNOs are no different than the CLECs were seven or eight years ago," he said. "You've got to address it, but you've got to be equally ready for the collapse."