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Air Time: Mobile ESPN: A Blowout Loss: Page 2 of 2

The last, and perhaps most important factor when moving beyond basic voice
service as a primary service is the relevance, value and uniqueness of content.
For entertainment services like sports, it's not easy to compete with
high-definition TV and the Web. Yes, getting the latest scores on your phone
may be convenient, but except for gamblers tracking their latest bets, it's
not particularly compelling. The novelty appeal wears off much more quickly
and the entertainment value is limited. For most people, an iPod kills time
much more effectively than scaled down reruns of SportsCenter. And even if
users do place value on content, it has to be unique enough to differentiate.
Although Mobile ESPN did a credible job of packaging its content, it was not
particularly unique. A vast array of sports-related information--even rich
media--is available from all the carrier networks.

Mobile ESPN's demise doesn't necessarily mean that the MVNO business model
is unsustainable, but it is suggestive of more fundamental flaws in that
wholesale business model. Carriers are consolidating, increasing their
operational efficiency and lowering prices for basic services. They are
desperate to find new ways to increase monthly revenue per user, with
new data services and content seen as strategic. Content-oriented MVNO's
like Mobile ESPN--Helio is currently the best example--will face a steep
uphill battle in their efforts to differentiate themselves from the carriers
whose networks carry their packets.