John Hennessy has 15 years’ experience in the wireless phone business, owning and running a chain of Chit Chat Wireless stores in Wichita, Missouri, Texas and New Mexico.
Now he’s launching his own branded wireless service, with plans that he says will start at $9.99 for limited talk and text.
Chit Chat Holdings has signed an agreement with Sprint to offer Chit Chat Mobile, which Hennessy said will offer 3G and 4G service beginning in Wichita. The service will have a soft launch locally and then expand to other stores. Hennessy said he also has a couple of master dealers with “access to hundreds, in some cases thousands of existing stores throughout the United States” to sell the Chit Chat Mobile service.
“We’re launching with pre-pay customers first,” Hennessy said.
Jim Alfonsin, a national account manager at Sprint in Kansas City, said the agreement calls for Chit Chat Mobile to operate on Sprint’s network under the Chit Chat name.
Hennessy said he thinks the company’s low-price plans will give his company the necessary volume of pre-pay customers, and eventually contract customers, to successfully grow the venture.
“We kept our margins low, and secondly, we’re going for volume,” he said. “Volume will prevail.”
Chit Chat Mobile is what is known in the industry as an MVNO, mobile virtual network operator.
Sue Marek, editor-in-chief of FierceMarkets’ Wireless Group, which publishes online newsletters for the wireless industry, said MVNO is a tough market to operate in because it does have low margins and MVNOs have to pay wireless carriers for access to their networks.
“It’s a hard business model to make go,” Marek said.
But there have been companies that have been successful at it, she said, most notably TracFone, which has agreements to sell service in big-box stores such as Walmart and has roughly 20 million customers.
Hennessy expects to launch Chit Chat’s Wichita service in September, and launch services in the Missouri, Texas and New Mexico stores in the fourth quarter. He hopes to expand into 10 more markets in the first quarter of 2013.
Chit Chat’s stores in Wichita are at 2011 S. Seneca, 4730 S. Broadway and 401 W. 21st St.