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Reselling network services? Think twice.

Fortune contrasts the failure of SunRocket to the failure of Amp'd Mobile, noting that neither owned their own networks.  They simply resold what other operators provided. 

Now we're not saying that lack of network control is the sole reason for the demises of SunRocket and Amp'd. (Nor is network ownership a guarantee of success: Companies such as Teligent and Winstar had access to wireless spectrum in the late 1990s but nonetheless crashed.) But there's no question that telecom companies without at least some of their own network assets have a hard time making it.

There's a lot of truth in that simple observation.  Margins in communications businesses are slim, and by extension, resale margins even slimmer. 

{ 1 comment… add one }

  • Andrew July 30, 2007, 5:35 am

    Me too services can't compete on price. The solution seems pretty obvious to me – don't offer me too services.

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