• Business 2.0 Magazine, Thursday, October 19, 2006 12:15 PM

Mobile ESPN, which died less than a year after its launch, seemed like a good idea. Lease the network of massive telecom companies, go after a lucrative niche market--sports-loving 18-34 males--sell subscriptions and possibly ads, then sit back and bask in incremental revenue glory.

Well, it didn't work out for ESPN parent Disney, but that doesn't mean the model is broken--it just means consumers didn't care for the product.

But Mobile ESPN isn't the only Mobile Virtual Network Operator (MVNOs license a third-generation mobile network from a major operator, then sell a media-service subscription with branded handsets to a niche audience at a premium.) It was just the most high-profile provider to kick the bucket.

"Mobile ESPN failed for specific reasons," says the business magazine--adding that many, if not most MVNOs are actually thriving, while charging $100 per customer per month. In fact, the Yankee Group recently forecast that the MVNO market would double by 2010, to more than 30 million subscribers.

The two biggest players in the market right now are the older, more established Virgin Mobile USA--a joint venture between Richard Branson's everywhere brand and Sprint Nextel--and Helio, the newest player in the MVNO market, founded by Korea SK Telecom and EarthLink. VMU has 4 million teen and 20something subscribers--nearly one-third of the market--while Helio, through its Korea connection, has an in with the most innovative telecom market on the planet. The latter has also just forged a deal with News Corp.'s MySpace that lets its customers update and add to their profiles via their phones.

Read the whole story at Business 2.0 Magazine »