Cell phones go special interest

Sprint Nextel Corp. is the biggest carrier of traffic from these "virtual" cell phone companies, serving about 20 other brands with a combined 4.6 million subscribers. That doesn't include nearly 2 million customers of the company's wholly owned Boost Mobile brand.

Boost and Virgin Mobile, which is part-owned by Sprint, are the elder statesmen of this emerging market, and both focus on the younger crowd, the most popular target among these niche brands.

But is there enough of a market to support so many brands? And since a majority of cell users still complain about simple call quality and network coverage, how many would want to trust ESPN to be their phone company?

Cell subscribers recently surpassed 200 million in the United States, accounting for more than two-thirds of the nation's population, so analysts expect market growth to slow and several predict that at least some virtual brands will fail. JupiterResearch estimates that a virtual cell brand needs from 300,000 to 500,000 subscribers to be financially viable.

Some of the new brands stress lower prices and prepaid offerings for users who can't meet credit requirements. But some like ESPN, Helio and Voce are positioning their services as premium products that can command higher fees.

The cheapest plan from Mobile ESPN is $65 a month, more than twice the entry-level $30 calling plan from Sprint. And the first phone being sold by Mobile ESPN is a Sanyo handset costing $400 after an instant rebate — twice as much as an essentially identical phone available from Sprint.

Paul Martjuchin, a controller for Credit Suisse First Boston in New York City, was undaunted, saying his ESPN phone may even save him money since he doesn't need to buy as many newspapers and books for his hour-plus commute to and from Carmel, N.Y.

Having heard about ESPN's plans from a neighbor who works for the new mobile unit, Martjuchin held off for months on replacing his aged Verizon Wireless phone until the new service launched in November.

"If you saw my (old) phone you'd laugh. It was three years old and literally falling apart," said Martjuchin. "I desperately needed a phone at the time, but I'm a huge sports fan."

The higher cost also didn't stop Grauer, but he wonders whether some of his friends would be willing to pay so much even though they were intrigued by the service.

"I didn't mention (the phone's price) to them because I was a little bit embarrassed that I paid that much. I know they would have ribbed me about it," said Grauer, a retired mortgage banker who lives in Cheektowaga, N.Y., just outside Buffalo. "The price of the phone is steep, and I don't know why ESPN would set it that high. You really have to be a sports nut, which I'll admit I am. But if I wasn't, that price would drive me away."

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