Defining What it Means to be Virtually Mobile

The cover story of this month's issue revisits the concept of the mobile virtual network operator, a strategy we have explored numerous times in this publication as a way for major brands to deliver wireless service without the need for dedicated networks. The difference this time is that the major brand employing the MVNO approach also happens to be a major carrier: Qwest Communications.

So does Qwest's move finally validate the embattled MVNO model? Does it mark a strategic coup for Qwest, or both? According to Vince Vittore's feature, the general industry consensus is no — on both counts. Go to the story, which starts on page 38, to find out more about why many critics think Qwest's is a flawed strategy.

I tend to agree with the naysayers of Qwest's wireless service approach, but not necessarily because I think the plan won't work for Qwest. Mine is more of a semantic argument.

While the MVNO approach to offering wireless services appears to offer a good entrée for highly recognizable brands that are not already providers of communications services, for Qwest it serves as a way to add a service to its bundle that wasn't there before — and, as one of the big-carrier elite, absolutely needs to be. In Qwest's case, the carrier's method for getting into wireless is far less important than what it's able to accomplish once it's there.

People expect major telecom brands to be providers of telecom service — and in today's world, they expect major telecom brands to be providers of all kinds of telecom services, be they wireline voice, mobile data or high-speed Internet access. Qwest knew it needed to be more successful in wireless, so it found the quickest and most cost-effective way to get there.

That's not to say that Qwest won't find success in the mobile market — only time, market conditions and customer movements will prove that out. But to call the carrier's strategy an MVNO move is, I believe, to apply a misnomer: The MVNO label should be reserved for straight branding plays in wireless. It should not be used to tag the efforts of an existing carrier to try to be a wireless player in the same arena as its wireline carrier peers.

A far better measure of how, where and why the MVNO strategy works in the way it was conceived is the success story of Virgin Mobile, which started with a brand — a non-telecom brand — and now offers wireless service to 1.75 million customers. Further measurements of the MVNO strategy's potential will come when Disney becomes a mobile brand, or when Wal-Mart goes wireless.

When that starts to happen — and the same critics who panned Qwest's efforts maintain it will — this industry will know whether the virtual approach to wireless really works.