Lightyear has just announced a five-year agreement with Sprint wherein it will provide service as an MVNO, or mobile virtual network operator. The upside for Lightyear is that it will have Sprint’s reliable network backing it, and access to a lot of the handsets that Sprint has to offer. The downside is that it will be an MVNO, and a quick glance at the business model’s rate of success in the United States already has me feeling not-so-optimistic about it.
Lightyear will provide pre-paid and post-paid options as a carrier, so at least it won’t be alienating either crowd, and perhaps it could be off to a good start with its existing subscriber base of 60,000. Hopefully it won’t suffer the same fate as Disney, Helio and other MVNO services that didn’t do so well in the North American market.
The press release follows:
Lightyear Network Solutions Launches New Mobile Phone Agreement with Sprint
Louisville, KY — Lightyear Network Solutions, Inc. (OTCBB:LYNS.ob – News), a provider of data, voice and wireless telecommunication services to business and residential customers throughout North America, today announced that it has launched its MVNO (Mobile Virtual Network Operator) operations under a new five-year agreement with Sprint.
The contract allows Lightyear to partner directly with Sprint on new wireless products, and provide postpaid and prepaid mobile telephone products and service utilizing the Nationwide Sprint Network. The agreement provides numerous benefits for Lightyear, including a larger and improved selection of the newest Sprint wireless devices, quicker access to those products, greater flexibility regarding product and service offerings for Lightyear customers, and the ability to offer bundled Lightyear wireline and wireless products.
The MVNO agreement enables Lightyear to offer an enhanced suite of wireless products, while lowering its costs. Lightyear’s sales force will immediately begin offering these enhanced services under the MVNO agreement to its more than 60,000 customers.
Lightyear recently initiated a marketing program to increase its commercial business activities, and this agreement with Sprint will enable the company to expand its efforts with new and existing business customers, including the availability to offer new solutions such as fixed mobile convergence. The agreement will also provide benefits to residential customers who will have access to a broader selection of wireless handsets, including a number of phones with the increasingly popular Android operating system.
“We are pleased to announce the launch of our MVNO with Sprint, which has been a valuable Lightyear provider partner for a number of years,” said Stephen M. Lochmueller, Chief Executive Officer of Lightyear. “This MVNO agreement will contribute to our long-term strategy to increase our organic growth. We expect our wireless business to contribute to our growth and profitability in 2011, with increasing benefits in future years.”