Bankrupt Solavei Preparing Stage 2

Solavei, a T-Mobile MVNO (mobile virtual network operator, essentially a reseller of an existing service provider's network) has announced it will launch its "phase two" services at the start of October 2014. Solavei was formed in fall 2012 and launched its $49 a month unlimited voice, text and data plan. However, Solavei's key feature and benefit is the referral program, which rewards customers with monthly discounts if they sign up new customers to the service. One of their more successful customers has signed up so many new customers to the service that she receives $300 a month of commission and of course gets her service free of charge. Solavei have not provided any details about the second phase of its services other than to explain they are focusing on the Hispanic market, where the majority of their new customers are from. They are also going to improve the Solavei Marketplace, launched a year ago, to integrate users credit cards in order to more easily receive discounts and rebates.

Solavei filed for bankruptcy at the end of May 2014 with only 101,500 customers on its books, despite a system designed to support millions. The company explained that it has made progress within the bankruptcy proceedings and expects to emerge at the end of 2014 or early in 2015. The business filed for voluntary bankruptcy protection because it wanted to restructure its debt "in line with operating income and more accurately align costs and infrastructure needs." The Chief Executive Officer, Ryan Wuerch, talked up Solavei's technology platform and social media integration, which is designed to help customers sign up their friends and family to the service. In the last couple of years, the business has received investment of around $70 million, generated $110 million and paid out almost $30 million in commissions. Ryan also highlighted that the company has received patents on the technology it has designed.

Something else that Ryan explained is how Solavei are considering replacing or supplementing T-Mobile as their network partner. If Solavei added another network partner, they would join other MVNOs such as Red Pocket Mobile, where customers can pick the right network for them depending on their device and location. Reading between the lines, Solavei's offering has not gained significant traction in what is a competitive marketplace where it's difficult to establish a clear differentiator between yourself and your competitors. Adding more networks to Solavei's offering should help things as well as providing customers with potentially better coverage. We only have a few weeks to wait until we know that Solavei's phase two actually entails, but we'll let you know as soon as we do.

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David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.