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Cell phones go special interest

A new wave of specialized cellular brands say they'll win customers by catering to the customized interests or needs of distinct audiences, such as sports fans or immigrants.
"You really have to be a sports nut, which I'll admit I am," says Jon Grauer of the high cost of his new ESPN mobile phone.David Duprey / Ap / AP
/ Source: The Associated Press

When Jon Grauer sits down for dinner or settles in to watch Desperate Housewives, or just about any other show on TV, he's sure to have his trusty new cell phone at his side. It's not that he's expecting any phone calls. He just wants to keep checking the latest sports scores on his Mobile ESPN cell phone.

"It may sound strange, but I do use the phone when I'm watching TV," said Grauer, a self-described "sports nut" who maintains his own sports-themed Web site with scores and news (as well as a link devoted to the singer Neil Diamond). "You don't want to take your attention too much away from the TV. You just want to get updated."

Ana Maria Ramirez, instead of signing up with her husband's cell company, bought a mobile phone from Movida, which caters to the nation's fast-growing Hispanic population.

"My English is not so good," so Movida's Spanish-speaking customer service agents were a welcome relief, said Ramirez, who lives in Miami. The agent "answered all the things I wanted to know" about how the service works. "And then I called again because I didn't understand how to send text messages. They were very patient, and they explained it very, very well."

Movida and Mobile ESPN are among the earliest of a new wave of specialized cellular brands expected to hit the market over the next year. These players say they'll win customers by catering to the customized interests or needs of distinct audiences who are underserved by the all-things-to-all-people approach of the major wireless carriers.

There's "Amp'd Mobile," expected to go live this month with an eye on the youth market, and Helio, which plans to launch by mid-2006 aimed at more affluent young adults. For members of the even younger set and their parents, ESPN parent Walt Disney Co. is planning a Disney cellular brand. Content such as music and video games all figure prominently in these plans, but few specifics have been disclosed.

Another service named Primus Wireless specializes in cheap overseas calls for immigrants. On the other end of the spectrum, a planned service called Voce is going for a luxury clientele with high-priced phones and services. And IDT Corp. recently launched TuYo Mobile, which is targeting the Spanish-speaking community like Movida, a unit of the Cisneros Group.

In all, JupiterResearch counts roughly three dozen niche wireless plays that have been launched or announced in the United States alone.

None of these companies operate their own wireless networks, though a handful are fully or partially owned by big wireless companies. Instead, they all pay the big operators to connect to the same wireless towers as the national brands.

Sprint Nextel Corp. is the biggest carrier of traffic from these "virtual" cell phone companies, serving about 20 other brands with a combined 4.6 million subscribers. That doesn't include nearly 2 million customers of the company's wholly owned Boost Mobile brand.

Boost and Virgin Mobile, which is part-owned by Sprint, are the elder statesmen of this emerging market, and both focus on the younger crowd, the most popular target among these niche brands.

But is there enough of a market to support so many brands? And since a majority of cell users still complain about simple call quality and network coverage, how many would want to trust ESPN to be their phone company?

Cell subscribers recently surpassed 200 million in the United States, accounting for more than two-thirds of the nation's population, so analysts expect market growth to slow and several predict that at least some virtual brands will fail. JupiterResearch estimates that a virtual cell brand needs from 300,000 to 500,000 subscribers to be financially viable.

Some of the new brands stress lower prices and prepaid offerings for users who can't meet credit requirements. But some like ESPN, Helio and Voce are positioning their services as premium products that can command higher fees.

The cheapest plan from Mobile ESPN is $65 a month, more than twice the entry-level $30 calling plan from Sprint. And the first phone being sold by Mobile ESPN is a Sanyo handset costing $400 after an instant rebate — twice as much as an essentially identical phone available from Sprint.

Paul Martjuchin, a controller for Credit Suisse First Boston in New York City, was undaunted, saying his ESPN phone may even save him money since he doesn't need to buy as many newspapers and books for his hour-plus commute to and from Carmel, N.Y.

Having heard about ESPN's plans from a neighbor who works for the new mobile unit, Martjuchin held off for months on replacing his aged Verizon Wireless phone until the new service launched in November.

"If you saw my (old) phone you'd laugh. It was three years old and literally falling apart," said Martjuchin. "I desperately needed a phone at the time, but I'm a huge sports fan."

The higher cost also didn't stop Grauer, but he wonders whether some of his friends would be willing to pay so much even though they were intrigued by the service.

"I didn't mention (the phone's price) to them because I was a little bit embarrassed that I paid that much. I know they would have ribbed me about it," said Grauer, a retired mortgage banker who lives in Cheektowaga, N.Y., just outside Buffalo. "The price of the phone is steep, and I don't know why ESPN would set it that high. You really have to be a sports nut, which I'll admit I am. But if I wasn't, that price would drive me away."