this issue>general prepaid

5 Minutes With
Joe Gensheimer, COO of Movida Communications
By Gene Retske

In the MVNO world, we all know that niches can be very lucrative. One of the most successful new companies is Movida Communications, which was founded by three former Sprint PCS executives who saw the potential of the Hispanic prepaid wireless market. They were able to convince the renowned Cisneros Group to provide financial backing and they are off and running. They have recently struck a deal with Wal-Mart to distribute Movida products. Joe Gensheimer was, among other things, the chief counsel of Sprint PCS. Today, he is the COO of Movida. Their vision is unique and highly focused. Joe shared some of the secrets of their success with us.


GR: So, David Grigg told me that you were employee Number 20 of Sprint PCS? Is that correct?

JG: That is correct.

GR: Wasn’t Sprint one of the first cellular companies to go to a reseller program?

JG: Yes, Sprint started an affiliate program, and was the first to do that. They said, “You know, there are a lot of markets that we don’t think we can make money in, but there are other people who feel they could.” So, we set up the affiliate program, and they did really well. Then, they were the first to do a reseller program. They started with smaller resellers. Unfortunately, a number of them were not adequately capitalized or didn’t watch their costs. As you know, in prepaid, you really have to watch it. You cannot be spending more on services than you get in revenue.

GR: You mean you can’t make it up in volume?

JG: (laughs) No, if you have a large amount of fraud, you will have a tough time making a go of it.

GR: Who were the first resellers?

JG: Well, Virgin was really the first MVNO, a joint venture with Sprint. That’s what made Sprint believe that there really was a business here, a market here that we, ourselves cannot tap.

GR: Virgin did something that Sprint could not do?

JG: Virgin’s initial marketing ploy was to hand out condoms in San Francisco with a logo on it that says, “Avoid long term commitments.”

GR: What? You’re joking!

JG: No, I still have one. They were pink. Sprint would never do that. It was a perfect example of how you are addressing a certain market and taking a certain approach, shall we say?

GR: How successful was that promotion?

JG: Very successful. A big increase in sales. It got them a lot of attention. Virgin already had a good market name, but they had to make a wireless brand name, which they did. They sold outside the Virgin Mega stores in San Francisco and other places. That seemed to work, and they ended up working with a number of other resellers who were small MVNOs, and targeting big communities.

GR: How did you get started with Movida?

JG: I ran into a couple of other guys that I worked with at Sprint. One of them, Anthony Montoya, thought that there might be a market for a Hispanic oriented MVNO. He felt that it was an underserved market. Everybody we talked to thought that it was such a great idea. We wondered why everybody else wasn’t already doing it, but it turned out that nobody else was doing it. We ended up signing up Wal-Mart for distribution.

GR: This is a Hispanic oriented product?

JG: It is. It is a Spanish handset. When you turn it on, it is in Spanish. Our marketing materials are all in Spanish, although we do have English as a second language. If you call our customer care, you will get a recording saying, “Press two for English.” People say that is our motto - “Press two for English.”

GR: Sounds like Miami. If you are bilingual, you also speak English.

JG: That’s it! Our call center is in Argentina. A lot of our content is Latin American, from Central America and Mexico. We are not translating American stuff into Spanish, but bringing in stuff that people like, like horoscopes, joke of the day, saying of the day, other features and news that is currently available on wireless phones, mostly prepaid, in Latin America.

GR: Are most wireless services in Latin America prepaid?

JG: Absolutely, 80%, or more, so our customers are used to that.

GR: So, how important are enhanced services? In the prepaid calling card world, they were very commonly offered, but very rarely used. Is that what you are finding in wireless?

JG: In the Hispanic market, particularly the unbanked, they have no ability to access the Internet. Their phone is their convergence, their data solution.

GR: How are these enhanced services accessed? Using the digital display on the handset?

JG: Exactly. There are two different ways. One is called “premium SMS” where you send a short code, say 4 to 6 digits, and you get back a list of other short codes you can send. You can sign up for, say, horoscopes, right? So, for two bucks, you might get a month of horoscopes. Every day you get an SMS with the horoscope for Taurus. Or, you might get the saying of the day for a dollar a month, I might send them the saying for today.

GR: And they are debited against their card for this?

JG: Right. It is deducted from their account. I sell $20, $30 and $50 cards. Most people buy $20 cards.

GR: Really?

JG: Yes, I don’t know why, but they do. You will see that is true across the board, everyone in the wireless area. Twenty dollar cards are probably 75% of the business, which is good for retailers who sell the cards because people will come back to recharge. And, then they buy other things, so it’s a real good lead in.

GR: What do you think contributed to Movida’s accomplishments in so short a period of time?

JG: There are three things that have worked well for us. One, having great retail relationships. Two, having the Sprint network; Sprint being willing to support us. And, quite frankly, three, having an investor who knows the market, was in the market. We are lucky to have that.

Joe Gensheimer is COO of Movida Cellular. Visit Movida online at www.movidacellular.com.