Latina pop sensation and entrepreneur Jennifer Lopez is trying to do something her ex-boyfriend P. Diddy couldn't -- launch a successful Mobile Virtual Network Operator (MVNO). She is teaming with Verizon Wireless on a new 4G LTE network and wireless service dubbed Viva Movil by Jennifer Lopez.
Verizon and Lopez announced the new venture at the CTIA Wireless Conference in Las Vegas on Wednesday afternoon. Lopez built the brand in partnership with Brightstar Corp. and Moorehead Communications.
The retail stores aren't targeting Latin America. Stores will open in U.S areas with high Latino populations, though, like Miami, New York and Los Angeles, in the weeks ahead. J.Lo will begin with a strong lineup, including the iPhone 5, Samsung Galaxy S IV and BlackBerry devices. Retail stores -- and a Facebook app featuring the star -- will be bilingual.
"As modern Latinos we do things differently, including how we shop for devices," Lopez said in a CTIA press conference announcing the partnership. "Latinos love social networks and we're super active online."
No Rock-Star Guarantees
Roger Entner, a wireless analyst at Recon Analytics, told us succeeding with an MVNO is a tough business proposition.
"Even being a rock star doesn't ensure certain success. But she has picked good business partners in Verizon and Brightstar and in Moorehead Communications -- and she put money behind it," Entner said, noting Lopez's equity stake in the project. "She won't be able to change the pricing structure."
That means whether consumers go to a Verizon store or a Viva Movil store, success comes down to service. Whether or not consumers will flock to J.Lo's stores simply because she's "Jenny from the 'hood," Entner said, remains to be seen.
Will J.Lo's Risk Pay Off?
Many companies have launched MVNOs. Most have failed. Some have succeeded. Entner points to Tracphone, the leading prepaid wireless provider, as one MVNO that has proven extremely successful. But Tracphone has found success selling into other people's stores but building its own retail presence.
"The funny thing is her ex-boyfriend P. Diddy did a previous MVNO at a previous CTIA show -- and even offered a keynote announcing it -- and nothing ever happened," he said. "And here, now, his ex-girlfriend is actually becoming an MVNO. It is funny how the world comes full circle."
Still, only time will tell if Lopez's risk will pay off where P. Diddy and others have failed. As Entner sees it, if there's money to be made, copycats won't be far behind. But historically, he maintained, it's been difficult to succeed in this space.
"We've had dozens of MVNOs launched and most of them never took off because they thought the wireless carriers were bumbling idiots and the world was just waiting for them to take the money from the hands of big carriers," Entner said. "That's really not the case. Lopez is smart here in partnering with all these companies who have experience in running the stores and in the distribution of handsets and in providing wireless service."