NewsDude

A few years ago, organizations from Disney to 7-Eleven to the local pinochle club were jumping into the cell phone business, leveraging their brands to appeal to niches untapped by the big carriers.
Now, many are digesting a hard reality: Running a wireless company isn't as easy as it seemed.
Many resellers of cell phone service -- which lease the networks of national carriers -- are closing, going bankrupt or struggling.
"Most of these people came in with a gold rush mentality," says Roger Entner, senior vice president of IAG Research. "Let me show up, and millions will flock my way."
The latest casualty is Sonopia, which helped clubs and organizations set up their own mobile services. The company is shutting down, says Greg Beltzer, a spokesman for Sevin Rosen Funds, a Sonopia investor.
Earlier this year, Hispanic-focused Movida Communications and high-end boutique Voce filed for Chapter 11 bankruptcy. While Voce shut down, Movida was quickly snapped up by Paul Greene, CEO of gear provider APC Wireless.
In the past 18 months, ESPN Mobile, Disney Mobile and youth-targeted Amp'd Mobile have all flamed out. All told, about 10 wireless resellers have closed shop, leaving about 55, says consultant Alex Besen of the Besen Group.
Others are struggling. Even Virgin Mobile, the No.2 reseller, said Monday that first-quarter earnings fell 75 percent vs. a year ago. That followed a $14.7 million fourth-quarter loss. The company largely blames the sluggish economy.
Resellers, also known as mobile virtual network operators (MVNOs), are being tripped up by:
*Fresh competition from the major carriers. With U.S. cell phone penetration reaching 84%, the big carriers are targeting the faster-growing youth and lower-income prepaid markets that had been the province of MVNOs such as Virgin, say Entner and Yankee Group analyst Chris Collins.
*Failure to offer a distinctive service. ESPN, Amp'd Mobile and Helio coveted the same...

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