Virgin Mobile’s Broadband2Go Seeks to Grab a Piece of the Mobile Broadband Pie

| Jun 11, 2009 | Wireless Services - U.S. | Competitive Intelligence Report

| Analyst: Bill Ho

Current Perspective: Slightly Positive
Vendor Importance: High
Market Impact: High

Event Summary

June 10, 2009 - In late June, Virgin Mobile will offer Broadband2Go, a national prepaid wireless Internet service with varying price points and usage thresholds. The Novatel MC760 USB modem at $149.99 powers the service with availability exclusively at Best Buy Mobile.

Analytical Summary

• Current Perspective: Slightly positive on Virgin Mobile’s entrance into the prepaid mobile broadband arena, because the offering expands the MVNO’s appeal beyond voice and provides another outlet to allow prepaid data users to take advantage of a 3G network. Broadband2Go opens up new revenue opportunity and dovetails with Virgin Mobile’s strategy to acquire low-churning, high-value users. Though targeting the right demographic at Best Buy Mobile, this exclusive relationship may limit greater service uptake.

• Vendor Importance: High to Virgin Mobile, because as the voice segment gets more competitive and is viewed more as a low margin business, moving into mobile broadband services enables the MVNO to grab a piece of the growing mobile data pie, especially when smartphones and subsidized netbooks have piqued public awareness of wireless Internet access.

• Market Impact: High on the wireless services segment, because Broadband2Go is essentially a first to the market. Virgin Mobile has no national prepaid competitors. Except for regional player Leap with its Cricket Broadband Internet, Virgin Mobile can poach postpaid carriers’ market share by providing a flexible and no-contract alternative.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Competitor Actions

• AT&T and Verizon Wireless need to address what they can do in the prepaid mobile broadband space without threatening the profitability of their postpaid plans. Both carriers should concentrate any prepaid offering on casual use similar to Virgin Mobile’s approach. If AT&T decides to offer prepaid mobile broadband, it should include limited WiFi hotspot access as a value-added benefit.

• Boost Mobile should continue to focus on its core voice and PTT users, and highlight the multiple data (Web and messaging) and voice (cellular and PTT calling), as there’s no national competitor that has all those elements.

• T-Mobile should consider getting into the prepaid mobile broadband game through its FlexPay platform. As it continues to build out its 3G infrastructure, it needs another revenue element to help its return on investment.

• MetroPCS should consider giving users an option to tether as an add-on for specific service plans (e.g., $40 and above). This obviates the need for inventory and support dedicated mobile broadband devices. This could be a stopgap data offering measure until its LTE deployment is fully baked.

Recommended End User / Customer Actions

• Casual mobile broadband users who need national capability and no desire for contracts should consider Virgin Mobile’s Broadband2Go portfolio. They should also be aware that the service and USB modem hardware can only be purchased at Best Buy Mobile. However, any Virgin Mobile Top-Up card can be used to refill the service.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Wireless Services - U.S. | More information

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