Mariposa to launch MVNO targeting US Hispanics
Mobile value added services (VAS) provider Mariposa is preparing to launch an MVNO targeting US Hispanics, CEO David Fondots told BNamericas.
Fondots sees opportunity in the market to compete with América Móvil’s Tracfone and Virgin Mobile, given that the former has a rural-based client base and the latter requires a credit card.
Univision, through an agreement with T-Mobile, is the only MVNO that specifically targets US Hispanics, said the executive. “They’re doing a good job. But the guys responsible for media are not allocating enough time to advertising. They’re not leveraging their strengths. Their plans are too complex,” Fondots said.
“We will go with one offer — a his and hers phone — and simple plans,” he said.
DISTRIBUTION IS KEY
Fondots believes distribution is the key to success, as most people use phones as their main computing device and need to be able to top up whenever and wherever they want.
“You need the distribution and for people to be able to pay in cash. Many MVNOs don’t do well because they go for the top of the pyramid. Their value proposition and way of collecting money aren’t in line,” Fondots said.
Mariposa expects to open its own branded stores in major US cities. The company will also change the look and feel of prepaid cards. “We’ll make sure cards are prominently displayed and appropriately colored and with popular artists and images, making them unique,” said Fondots.
In the short term, Mariposa is not looking to set up an MVNO in Latin America, though it believes there is potential. “Mexico is interesting with all the regulatory changes happening. There could be a wave of MVNOs there,” Fondots said.
But the Latin American market is still a tough challenge. MVNOs face low margins and compete on costs with the major operators. To make the business model viable, consumers need to be topping up regularly and for decent amounts.
“It’s a race to the bottom. In Asia, people top up 50 US cents a time but they top up 12 times a month. In Latin America people are only topping up twice a month and for smaller amounts like 30 Mexican pesos. If you’re in that model, you need to have tens of thousands of places to top up, which is why distribution is so important,” Fondots said.
By Patrick Nixon