Blyk ad-funded MVNO model fails

Blyk has finally pulled the plug on its mobile virtual network operation, a move that will be seen as an admission of failure of its ad-funded MVNO model.

The firm, which launched its first operation in the UK in 2007, had planned to replicate its MVNO model in multiple markets but that expansion never happened. It looks likely that the MVNO model has proven unsustainable because it lacked the reach that advertisers look for. The UK customer base remains in the low hundreds of thousands and Blyk itself has suggested that advertisers are more drawn to its service for market research purposes than brand advertising campaigns.

In November the firm changed its business model and a spokeswoman told telecoms.com this week that since then, Blyk has been renegotiating its contracts with operator partners to roll out a managed services offering, rather than a full-blown MVNO.

The first partner to take the company up on its new strategy is Vodafone Netherlands, which had already formed a partnership with the company in 2008. Blyk said that the Netherlands has the third highest advertising spend per capita in Europe and is a hub for many global companies and ad agencies, making it an ideal market for Blyk to pitch its advertising services.

Under the deal, Vodafone will provide infrastructure, while Blyk will provide advertising technology and sales facilities for an own branded service.

It remains to be seen what will happen to its existing operation in the UK, which it runs in partnership with Orange, seeing as the Blyk spokeswoman said the MVNO “is no more”. In this case it seems likely Orange will just absorb the few hundred thousand subscribers.