MobileX's big bet on Walmart and what’s next

LAS VEGAS – MobileX kicked off MWC Las Vegas on Tuesday by announcing a multi-year exclusivity deal with Walmart, elevating the MVNO’s standing in the U.S. prepaid business.

MobileX is relatively new to the scene, having first introduced its customized prepaid mobile plans in February 2023.

But it’s not entirely unknown in prepaid. The company, which uses Verizon’s network, was founded by a well-known personality in wireless – Peter Adderton, who was among those who brought the Boost Mobile brand to the U.S. in 2001. It eventually was sold to Nextel Communications and later became part of Sprint.

Through the T-Mobile merger with Sprint, Boost landed in the hands of Dish Network. Adderton frequently shares his thoughts, often critical, on social media about the current state of the Boost brand even though he’s no longer formally affiliated with it.

MobileX’s shtick is it uses AI to predict how much data customers need so customers aren’t spending a lot of money on data they don’t use. Adderton surmised that MobileX’s unique pricing strategy is one of the reasons it caught the attention of Walmart. Starting in October, MobileX will be offering SIM cards in some Walmart stores, with customized plans starting at $4.08 a month, as well as offers of $14.88/month and $24.88/month.

Adderton said he can’t speak for Walmart, but when his team showed the platform to the company, he believes the “innovative, disruptive approach caught their interest. I’ve always said if you’re going to launch an MVNO, you’ve got to have something that’s different and it can’t just be a $25 unlimited plan with an iPhone.”

Looking at the mobile prepaid value space, “that’s a Walmart customer,” he said, adding that Walmart is familiar with the prepaid space and knows what it’s doing. The MobileX SIM card stater kit is now available at Walmart.com for $9.88.

In addition, the Walmart team that MobileX is working with is genuinely interested in saving customers’ money, and “I think that’s why you see a new brand like ours and a new technology like ours going into Walmart so quickly,” Adderton said. He also believes Walmart sees how MVNOs are being bought by larger carriers and the need to preserve the viability of MVNOs because that’s a big avenue for large-scale retailers to compete in wireless.

Adderton confirmed that it’s an exclusive deal, meaning MobileX can’t sell its service in other big box retailers. That’s a big bet he’s making on the retailer, but he said 90% of Americans live within 10 miles of a Walmart. In addition, Walmart sells a lot of prepaid brands, including Straight Talk, which is now owned by Verizon and is exclusive to Walmart.

It also excludes MobileX from doing a distribution deal with Amazon, which is who Dish Network hooked up with for its Boost Infinite brand.

Physical stores or online only?

There is debate within the industry as to whether online-only is a good strategy. Some brands prefer it because it eliminates the cost of doing business in physical stores, and the younger segment of the population prefers digital-only experiences. But Adderton is not in that camp.

“One of the things that I’ve always believed is you do need to have the combination of digital and physical retail,” he said. Anyone can talk about where the industry will be in three years, but anyone who’s trying to undertake an online-only mobile business today is going to struggle, he said.

“For me, the physical retail store is as important as the online presence, but you need a combination of both,” he said. For the physical stores, “if you’re going to partner with somebody, you might as well partner with the biggest.”

MobileX, which employs about 35 people, mostly developers, is currently pursuing a bring-your-own-device (BYOD) model, in part because Adderton doesn’t believe in subsidizing handsets. It’s selling physical SIM and eSIM cards and not handsets. “We want to come up with a unique way of getting devices to consumers,” but in the meantime, consumers need to understand that despite all the offers out in the marketplace that might imply otherwise, it’s the consumer who ultimately ends up paying for the devices, he said.

MobileX plans to get its product into as may Walmart stores as possible between now and the late December holidays. Adderton said he will personally go into stores to help stock the shelves. That’s something he takes pride in doing – visiting stores “to make sure we’ve got it right.” Eventually, MobileX expects to be in about 4,000 Walmart stores.

He declined to reveal specific details but suggested MobileX will have good placement in the stores as opposed to being stuck somewhere behind a counter where it’s hard to find. “It’s a unique partnership,” he said.

Adderton also said he’s a big believer in the dealer ecosystem and once the Walmart distribution gets underway, he wants to work on getting the MobileX dealer ecosystem up and running, possibly by late 2023 or early 2024.

But he acknowledged that he’s been associated with both successes and failures in his career, and the failures often had to do with trying to do too much too soon and not executing properly.

Therefore, “we are very focused on executing and scaling,” and that’s what the team is driving toward, he said. “This is a marathon for us. It’s not a sprint.”