Wednesday, November 23, 2005

On the ground: Virtual providers by the dozen!

I'm not sure how profitable it is. I'm not even sure how viable it is in the long term. But the world of virtual providers is getting crowded! Yesterday, Circle K announced they will offer cell phones at 2100 stores. These are convenience stores owned by Alimentation Couche-Tard inc. Basically they will offer prepaid phones with their own brand, provided by a company named Ztar. This company also announced earlier that they will make phones branded for 7-Eleven which will be available in 5300 stores.

Basically, a virtual provider is a company that uses a real provider's network to provide a cell phone service. For example, both of these are going to use Cingular's network. This means the coverage will be the same as what Cingular offers, and the features available to them are what Cingular has. The interesting part for the users is that these companies try to offer lower prices, since they have a lower cost from not having to maintain an actual network, and since they only offer prepaid services they don't really cut into the real providers profits. The problem is that consumers need a service that is there for the long term, especially for their phone services. Virgin Mobile started doing just that in Singapore in 2002. It took less than a year for them to close shop. Now they started the same service in Canada. Only time will tell which of these will remain, and which will go under.

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