MobileX, a new mobile brand launching in the U.S. next year, struck a network deal with Verizon. But it’s not your typical MVNO. In fact, Mobile X Global founder, Chairman and CEO Peter Adderton is going out of his way to say it’s not an MVNO. It’s taking advantage of Verizon’s Network as a Service (NaaS) platform.
An MVNO, or mobile virtual network operator, uses the network of a facilities-based carrier, like Verizon, and resells the service under another name, usually with some bells and whistles of its own. Cable companies like Comcast and Charter operate MVNOs using Verizon’s network.
Another example is TracFone, one of the biggest MVNOs that Verizon is in the midst of buying. That’s one of the reasons Adderton is so fanatical about the MVNO space. More on that later.
Adderton, who founded Boost Mobile, which was an MVNO, has been a thorn in the side of many wireless carrier CEOs these past several years. Part of that is because he’s frustrated with what’s happened in wireless. Adderton previously tried to make a go of it with Amp'd Mobile, which filed for bankruptcy in 2007 and also didn’t want to be known as an MVNO at a time when MVNOs were going out of business at a pretty good clip.
“I wasn’t looking to get back into the MVNO space,” Adderton told Fierce this week. “I’ve been fighting very hard for consumers. I saw the consolidation that has been going on in the wireless space,” and that propelled him to say: “I’ve got to do something here.”
Mobile X has been in the works for a while – some would call it one of the worst-kept secrets in wireless, if such a thing exists anymore. Adderton is a prolific Twitter user, posting on the status of Mobile X long before its official debut and generally razzing the executives leading wireless companies.
Back in 2001 with Boost, prepaid basically was shunned and carriers didn’t care so much about it. “We came in and really tried to make a difference and change the way that prepaid consumers were treated,” Adderton said. Fast forward to 2021, and “we’re in the exact same boat. We’ve got a shrinking of the market,” with five going to three with the removal of Sprint and TracFone. “I wanted to make sure we did something very, very different.”
The MobileX website is now live, but a lot of details are yet to be announced, such as exactly which devices will be available, how MobileX will work with dealers – which Adderton insists are an important part of his business – and price plans, but Adderton said those are part of his disruptive strategy. Other global carriers will be announced in the months to come, he said.
What is known is MobileX will be 100% in the cloud, fully digital and virtualized, based on the XO.1 platform. Verizon’s NaaS strategy “fits perfectly with what we’re trying to do,” he said. The venture is heavily eSIM-focused but will have physical SIMs. The emphasis is giving customers what they need based on usage rather than some bulk price plan. Brick and mortar stores are in the works, but “we want to do it differently,” he said. “I think the thing that’s important to me is the traditional wireless model … is basically broken and it needs reinvention.”
As for competing with Boost, his old company, and Dish, which purchased Boost as part of the government’s approval of the Sprint/T-Mobile merger, “I couldn’t buy Boost, but I’ll buy them one customer at a time,” he quipped. “We’re going after anybody who’s sick and tired of paying for stuff that they don’t need and I would argue that’s everybody.”
And yes, he’s going after T-Mobile, which created an image as the “un-carrier.” It’s a big target for him, he acknowledged. “I’m not going after just the small fries. I think there are T-Mobile customers who are sick and tired also of overpaying for stuff that they don’t need so we want to target them as well.”
As for being compared with John Legere when he was leading T-Mobile as wireless’ renegade CEO, there’s a big difference between leading an existing company and starting a new one, he said. “My whole life, I’ve started companies… I kind of like to compare myself more to people who have built things from the ground up that have risked everything and have risked their own money. I would argue that most of the CEOs at these large carriers today have never risked their own capital or their own money or their kids’ college funds to start an idea. There’s a very big difference. You run a lot faster when it’s your money and your idea.”
What’s taking so long?
One reason it’s taken so long to launch MobileX, according to Adderton, is he assembled “some of the best tech teams” who could create the artificial intelligence (AI) platform on which it’s based. Starting from “nothing” is similar to how he started Digital Turbine, a mobile advertising company now overseen by former Qualcomm executive Bill Stone.
With MobileX, the whole concept is to use AI to look at what the consumer needs and deliver based on that rather than offering more data than anyone could possibly use, which is how he says the wireless industry has been operating.
“The carriers’ model is basically to sell you data that you don’t need,” he said, noting that when he asks people how much data they use, they usually don’t know. Carriers offer “unlimited plans,” but most consumers don’t need that much data. Therefore, they’re paying too much.
It’s all new, he said of the MobileX model.
Adderton is quick to criticize wireless industry executives. How’s that going to play when the tables are turned? “I’m not going to rip people off by selling them stuff they don’t need,” he said.
The idea is to make it as easy to leave as it is to jump aboard – which is saying something if recent handset promotions are any indication. While carriers dissed handset subsidies for many years, they’re coming back into the mainstream, even if they’re being called something else in the form of handset promotions.
“I think we’ve gone back to a very dark place, which is the place that John Legere and T-Mobile blew up,” and that was about eliminating contracts and getting rid of handset subsidies. “We’ve gone back to that place again because that’s the typical carrier go-to model of locking in customers for a long time,” he said. “Our approach is, ‘you’re going to pay for a device, no matter what the carriers tell you.’”
Instead of the carrier telling the consumer what their rate plans are going to be, “the consumer will tell us,” he said. “That’s a big difference in what we’re doing versus what everybody else is doing.”
“I’m going to be the first brand that makes it super easy for a customer to leave us,” he said. In fact, “we’re going to try to make it as easy to join us as it is to leave us. If we’re not right for you and we can’t right-size your plan and we can’t save you money and you can get it better somewhere else, then I’ll move you over there.”
Here are a few more excerpts from the conversation with Adderton:
On working with a big carrier and Verizon in particular: “It’s not the old Verizon that I knew,” he said. “This is a very innovative Verizon. This is a very consumer-centric Verizon when it comes to wholesale. I’ve seen a massive change in Verizon’s approach.”
The biggest challenge is “un-brainwashing” the consumer, he said, referencing T-Mobile's Netflix offer. “This concept of ‘Netflix on us’ – it’s laughable… They’re not in the business of losing money or giving you stuff for free. We’re going to try to right-size the model.”
The problem with “MVNO” is it conjures up a lot of things, mostly negative. “It’s a tired term,” he said.
On eliminating global roaming charges: “Traveling around the world with global roaming drives me around the bend,” he said. “The fact that I had to continue to keep paying in America when I travel to Europe or Asia or Australia … not only am I paying for a service in America that I’m not using, I’m now paying extra to another carrier globally.”
“Our whole concept is one where once you leave the country, your data comes with you. Because we’re 100 percent in the cloud … we’re constantly monitoring and optimizing it. We have the ability to be able do that one world, one number… We will basically allow you to roam anywhere inside the Mobile X world,” which is basically the globe.” It’s doing deals with other carriers around the globe; “this is a truly global play.”
Will it be 5G? “We have 4G, 5G,” and obviously Wi-Fi, he said. “I’ve been a pretty staunch opponent of the over-hyping of 5G,” he added. “What I’m telling our Mobile X customers is: We’ve got you covered. Based on what you need, when you need it and the speed you need, we’ll take care of that. You don’t have to worry about 5G and all the stupid letters that come after it… This is a digital software platform. This is not an MVNO,” and not about trying to beat Ultra Mobile and Mint Mobile.
“Are we going to be successful? I guess time will tell,” he said.