An Underserved Minority Sector – Being Recognized

Implications: The Latino telecom/infocom sector is one of the fastest and until recently most ignored minority marketplaces in the nation. The Latino marketplace is the fastest growing demographic in the United States.  Like most things in life in the world; money talks.

Analysis: Unlike most MVNOs, Movida actually has something to offer; a customer segment that spends money.  I tend to view MVNOs as wireless resellers.  The MVNO business is relatively easy to get into and relatively tough to stay viable in.  As evidenced by Movida’s bankruptcy filing in March 2008.

As a reseller you are effectively selling services that are provided by the carrier.  The MVNOs strengths are its ability to price service packages accordingly and its ability to target market the service.  If the MVNO has the money, it may own the billing platform.  Owning the billing platform will give the MVNO the ability to rapidly respond to market needs for specialized pricing.

However, at the end of the day the MVNO is limited by what the carrier supports in terms of services.  If the MVNO has its own content platform it should be able to integrate its platform with the carrier’s switching platform.  Think Disney and Sprint a couple of years ago.

To succeed in selling telecom services to the Latino sector or any other cultural sector is through understanding the customers’ usage behavior and purchasing behavior.  Frankly you cannot expect any of the mega carriers to target sell in this manner.  When you have tens of millions of customers and are considered a one size fits all, the most you can do is post ads in a language other than English; like Spanish or Chinese.  Target marketing a sector requires deep knowledge of the sector.

Getting back to Movida; maybe Sprint’s new WiMAX relationship will enable Movida to rapidly expand into more urban population centers.  In fact maybe other ethnic focused MVNOs ought to consider doing business with the new Sprint WiMAX venture.

Movida had and still has brand recognition.  What Movida lacked was scale.  Movida needed to reach a certain critical size customer base before it could reach cash flow positive,  the acquisition should enable APC to aggregate Movida’s customer with the customers of APC’s other acquisitions.

Ethnic focused MVNOs can be very profitable.

The challenge for APC is getting all of the new moving parts to work together as a single corporate entity.