Using its own e-commerce platform, InPhonic creates and manages private-labeled web sites for online businesses, affinity organizations and national retailers, including Yahoo, Quixtar, MSN, and AOL.
It also sells wireless services and devices on its own web sites, using the same platform that integrates merchandising, provisioning, procurement, customer care and billing. It has agreements with the seven largest US wireless carriers, and several smaller carriers, and says it can offer consumers a selection of at least four carriers in each of the top 100 US metropolitan markets.
InPhonic also operates as an MVNO under the Liberty Wireless brand using airtime bought from Sprint Corp. It plans to expand this by offering other companies the ability to run their own MVNO services using InPhonic’s e-commerce platform, operational infrastructure and wireless airtime it has purchased.
The company said that as wireless carriers face increasing competition, excess network capacity and the challenges resulting from wireless local number portability, they are increasingly turning to the internet to acquire customers. Consumers too use the internet to find real-time comparative pricing and feature information.
InPhonic said its online business model connects wireless carriers, marketers and consumers of wireless services and devices more effectively and efficiently than traditional retail channels. It also sells data services, including a service that lets customers access email, voicemail, fax, contacts and personal calendar information through a web site, a telephone or wireless email.
The company’s business model has generated substantial growth, though it has yet to make a profit. In the year to December 31, it made a net loss of $44.3m, up from a loss of $17m on revenue 44.8% higher at $119.4m. In the first quarter to March 31, the net loss was $8.9m, down from $9.3m on revenue that increased 73.5% to $38m.
The reselling operation and e-commerce services are still the most important part of the business and accounted for 62.3% of revenue last year while MVNO, data services and MVNO equipment contributed 37.7%.
