Apr 28, 2004 12:00 PM,

Seventh heaven

by Dan O'Shea

It's hard to believe that I have a special place in my heart for a national convenience store chain, but I do. 7-Eleven's Big Gulps and Slurpees will forever live in my mind as the rewards for enduring grueling hours of little league practice on steamy-hot summer days.

However, a future generation might eventually remember 7-Eleven as their mobile phone company. The retailer announced this week that it is launching Speak Out, a new prepaid mobile phone service that is pre-activated, offers 120 days of airtime and charges callers just 20 cents per minute. 7-Eleven developed the service with the help of mobile virtual network enabler Ztar, and the service will be carried on Cingular Wireless' national network.

I have to admit that when I first heard last fall that 7-Eleven was going to test a prepaid mobile virtual network operator strategy, I was skeptical, and thought that I'd never hear of it again. It seemed to me that its large, transient customer base--even a somewhat loyal one of current and long-ago little leaguers--looked too much like the consumer mass market that traditional mobile carriers also were pursuing.

It seemed to me that the MVNOs most likely to succeed would be the ones that had well-defined niche markets, segmented by age, buying behavior, entertainment interests or something else that made them such specialized groups that traditional carriers were unable to meet their specific application needs.

Yet while almost all the companies I thought would launch MVNOs by now remain on the sidelines, the one I thought would never see the light if day is making a go of it.

Ultimately, while 7-Eleven still doesn't fit what I understand to be the model for a typical and successful MVNO, it is offering several things that fundamentally make it different than other mobile service offerings: Very low pricing, quicker and simpler set-up, and longer airtime.

7-Eleven's service is only just launching, but its willingness to compete in each of these categories is reminiscent of what mobile competition is all about--being better than the rest.

E-mail me at doshea@primediabusiness.com .