Best Buy to launch mobile broadband, possibly WiMAX
Retailer to partner with Sprint to sell wireless services under its own brand
Published: 29 June, 2010
READ MORE: US | Sprint Nextel Corporation | MVNO | WiMAX
US electronics retailer Best Buy is to launch its own-branded mobile broadband service next month, emulating a strategy adopted by similar firms in Japan.
First revealed by blog Engadget.com, the new service will be called Best Buy Connect, and extends a strategy for the store to offer services associated with the gadgets it sells, under its own logo. Bundling mobile broadband access with wireless devices such as netbooks has become an important tactic for carriers, enabling them to add value and increase customer control, but now the retailers are looking to fight for brand awareness, taking on the device vendors and the operators.
Best Buy Connect brand will offer plans starting at $29.99 a month for 250Mb without a contract, up to $59.99 for 5Gb. There will be a $35 activation fee, but this will be waived for customers who commit to a two-year contract. The services will ride on Sprint Nextel's network and that may include its 'Sprint 4G' system, which uses Clearwire's WiMAX platform, though this is unconfirmed. If true, it could compete with Clearwire's own-branded WiMAX services, which include prepaid and flexible tariff options, unlike its key MVNOs - Sprint and three cablecos - which have focused on contracts. In April, Sprint CEO Dan Hesse said prepaid WiMAX was a "possibility".
Best Buy has already set up specific mobile stores, or sections within superstores, and has announced its own movie download and ebook offerings. CEO Brian Dunn, in a recent earnings call, said: "Customers are really beginning to live the connected world in tablet computing. As the industry's leading retailer of mobile computers, we can't wait to see what new innovation this category brings and the opportunities to provide value added features like broadband connections." This bundled strategy would improve gross margins, he added.
In Japan, and in emerging markets like India, retail brands are more accustomed to taking priority over those of carriers in delivering integrated device/wireless offerings. This was highlighted by UQ Communications, a mobile broadband joint venture led by KDDI and Intel, whose WiMAX network supports several MVNO deals with major electronics retailers.
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