InPhonic to be a Cingular MVNO thru Libery wireless

InPhonic to resell Cingular’s service
By Kevin Fitchard

Aug 4, 2005 5:49 PM

InPhonic today announced that it is partnering with Cingular to help the carrier find mobile virtual network operator (MVNO) partners and resell its minutes through its own MVNO Liberty Wireless. InPhonic also scored a deal with Vonage to resell its VoIP consumer services over its network of Web retail sites.

At InPhonic’s second-quarter earnings call, CEO David Steinberg said that InPhonic would act as mobile virtual network enabler for Cingular and perspective virtual operators, reselling Cingular’s voice minutes and data services to any MVNOs that passed muster. While InPhonic will ultimately manage the network relationship for any potential partner, Cingular will get final approval over what MVNOs have access to its network, Steinberg said.

“Cingular wants to be very distinguishing about which MVNOs use its network,” Steinberg said. “It doesn’t want to let just any carrier have access.”

For InPhonic the relationship gives it critical access to a major GSM provider’s network. Coupled with a similar resale deal with Sprint, InPhonic can now sell both CDMA and GSM service, offering a choice of either technology to its MVNO customers or a combination of the two, as well as the ability to run its own prepaid wireless service, Liberty, over both networks.

Having GSM gives InPhonic and its customers much more flexibility in handset pricing, as GSM handsets scale much lower in price than CDMA handsets due to global volumes. “Some of our distribution efforts in the past have been hampered by handset prices,” Steinberg said.

InPhonic’s separate deal with Vonage makes it an authorized reseller of VoIP services, allowing it sell voice bundles over InPhonic’s network of Web sites and online promotion portals. Steinberg estimated that InPhonic’s sites see 12 million individual users a month. While its online sales were originally targeted at wireless service, InPhonic has been branching out. Recently it added digital broadcast satellite service to its portals and with the Vonage deal it now has VoIP.

InPhonic posted second quarter revenues of $81.6 million, up 63% from last year. Its loss was $1.7 million, down significantly from the $6.5 million the same quarter a year ago.