Supermarket MVNO catching on
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We’ve talked at length here on Prepaid Reviews about how MVNOs in America just aren’t working. We’ve seen services like ESPN Mobile, Disney Mobile, Amp’d Mobile, and XE Mobile tank in recent memory. In addition, we’re seeing slowing growth from Virgin Mobile, and an inability to turn a profit from Helio. Yet there is a company making a splash while flying under the radar.
Grocery store Kroger has it’s own wireless brand, i-Wireless. And unlike its defunct and troubled counterparts, this MVNO is making waves, albeit quietly, in the wireless industry. So how is this low-key operation thriving in the current wireless environment?
But i-Wireless says it is thriving thanks to its focus on the basics and relationship with Kroger. “So much of the North American MVNO market was brand-led, which … really competed directly with carriers in a game where they had much better scale,” says i-Wireless Chief Executive Paul McAleese. I-Wireless, he says, competes on distribution, not brand.
Though I’d definitely say that they do use brand to their advantage. McAleese even agrees with that:
“There’s a huge amount of loyalty and trust there,” notes McAleese. “People are predisposed to trust what you sell them in a grocery store.”
So there is branding involved, though it’s not branding specifically for wireless services. Instead, they use the brand they’ve already built up to distribute the i-Wireless service, which is available at roughly 2,200 Kroger stores nationwide, which is close to the number of AT&T company-owned stores and kiosks in the U.S. Kroger plans to add another 300 outlets by October.
Kroger is becoming a success because they keep it simple. There are no data plans. Just simple, straightforward calling plans that range from 10 to 25 cents a minute. That seems like the norm for many wireless resellers. They’re able to keep costs low by keeping just 16 people on staff, who run the network and answer customer service calls — in under eight seconds, according to McAleese.
Judging by the success of MVNOs like Tracfone and Page Plus, Kroger could be onto something here. Boost and Virgin have the corner on the “hip” youth market. The real successes, though, are going to target regular folks who just want affordable and reliable cell service, without any frills.
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