Rating: mvno8
In the past week, 3 UK has announced its first MVNO; KPN in the Netherlands has signed an agreement with Euphony to market a new brand Talkout in Spain and now Kajeet has landed USD 10 million.
I understand the continued niche targeting of an MVNO to foreigners like Talkout will be in Spain. There are a number of Brits in Spain and Euphony MVNO might be on to a winner.
I further sort of get 3 jumping on the MVNO bandwagon with Gamma. IP is the future and with Gamma 3 can make sure it has a slice of the action.
But Kajeet. I wish the company success but the company has already had USD 64 million in funding – and now it needs USD 10 million in debt financing. Hmmm. This doesn’t sound healthy. It sounds as though the vision of Kajeet remains but the turn around to a healthy MVNO is tough.
The retail market is essential for the growth and success of an MVNO. Kajeet has retail partnerships with Toys “R” Us but if Disney couldn’t sell mobile to mums in Disney shops – how on earth will Kajeet do it?
But it gets worse. I just looked at the Kajeet site and it seems to be all prepaid. This means no regular income no fixed gains for the MVNO – but a great consumer service. It just doesn’t add up. The only way Kajeet is going to work is if it hits the supermarkets and services are decided at point of sale. Consumers want to leave a shop with a ready to go device and this is possible if Kajeet gets into the supermarket retail market where there is a partnership with a brand. For example, Kajeet kids phone from Walmart.
Agreed, supermarkets have their own MVNO’s but Kajeet needs to push social responsibility. This could be a way in which the MVNO does succeed. Buying a Kajeet phone for a child will not then be about Parental Controls but about social security and neighbourhood watch.
But moving on from Kajeet. It’s been a couple of bad years for MVNO start-ups. Fingers crossed for everyone that the Chinese lucky number 8 is successful for everyone in 2008.