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Boost Mobile Offers 'Virtual Network' Service In Boston

Posted on: Thursday, 17 February 2005, 21:00 CST

Feb. 18--The number of cellphone companies may be shrinking. But for consumers, the number of cellphone brand choices is proliferating.

In the latest of several "virtual network" offers, Boost Mobile yesterday began marketing service in Greater Boston and nine other US markets. Boost is owned by Nextel Communications Inc. and uses its network. But instead of Nextel's heavy focus on tradesmen, delivery drivers, and mobile white-collar workers, Boost offers handsets, cellphones, and services aimed at under-30 "extreme sports" and rap music lovers.

Also, like many other "mobile virtual network operators," including Virgin Mobile and the 7-Eleven store chain's SpeakOut brand, Boost is a strictly prepaid service that doesn't require any one- or two-year contracts. Users pay 15 to 25 cents a minute to make cellphone calls and $1.50 a day for unlimited use of Nextel's marquee "DirectConnect" walkie-service, after buying a handset for from $60 to $500.

With more than 175 million Americans carrying cellphones and big national brands like Verizon Wireless, Cingular, and Sprint facing an increasingly tapped out-market for credit-worthy monthly subscribers, many industry analysts see well-targeted virtual wireless brands as a growing trend with years left to run.

"At some point it will saturate the market, but I don't think we're there yet in the US," said Patrick Zerbib, a vice president at Boston wireless consulting firm Adventis.

Last month, Internet service provider Earthlink reached a deal to launch a new wireless brand in partnership with Korean wireless carrier SK Telecom, using the Sprint network. Earthlink is hoping to distinguish its service by using high-end Korean-made cellphones to offer high-quality Web and Earthlink e-mail access.

Later this year, Walt Disney Co.'s ESPN sports network plans to launch a wireless brand using Sprint's network, with features like a scrolling sports news ticker on cellphone screens and wireless sports video clips. Disney itself is also widely seen as a potential cellphone brand, along with retailers such as Wal-Mart and Target, although none have confirmed plans.

"I think you'll definitely see movement into wireless from the cable companies as well," said Marina Amoroso, a wireless analyst with the Yankee Group. This comes as telecom companies increasingly invade each other's turf. Phone companies including Verizon Communications Inc. are spending billions to be able to offer cable television this year, and cable carriers like Comcast Corp. are gearing up new landline phone service offers.

To keep up with possible phone company "quadruple play" bundles of phone, Internet, TV, and wireless service, cable companies are likely to seek ways to offer their own company-branded wireless service, Amoroso said. In time they might bind the wireless phone service to their core cable by letting subscribers use phones to program home video recorders and check cable broadcast listings.

The growth in virtual brands comes as real brands are disappearing. Cingular last November bought AT&T Wireless for $41 billion. Sprint and Nextel plan a $35 billion merger later this year or early next. Second-tier carriers Western Wireless and Alltel plan a $4.4 billion merger.

Because Verizon and Cingular are both closely affiliated with Baby Bell phone companies, Sprint Nextel or T-Mobile USA is the likeliest wireless partner for cable. Time Warner Inc. may launch wireless service using Sprint's network in Kansas City this spring. Comcast Corp., which owns a $350 million stake in Sprint, has not revealed its plans.

Until yesterday, Boost was available in only about one-third of the country. Now it reaches areas that are home to 205 million Americans, including Eastern Massachusetts and southern New Hampshire. It has managed to attract 1.2 million subscribers already. Virgin Mobile has more than 3 million.

Compared to other youth-oriented wireless brands, only Boost offers Nextel's walkie-talkie service, which is consistently rated the fastest and best-performing "push to talk" service. "That's the number one reason people are buying the product," said Don Girskis, Boost vice president and general manager. Boost subscribers can use the walkie-talkie service not only with other Boost subscribers but also the 16 million Nextel users.

Otherwise, the main thing Boost-- which started in Australia in 2000 -- is selling is image and attitude.

"We really do live the extreme sports and music lifestyles we promote," Girskis said. Boost sponsors motocross and surfing teams and plans to sponsor street basketball and skateboarding competitions as promotions in Boston.

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NXTL, VMOB, SE, IYCOY, 8264, VZ, VOD, BLS, SBC, FON, ELNK, SKM, DIS,

Source: The Boston Globe

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