Radio Shack's own mobile network launches

Posted by Mark Raby

The next time you go into Radio Shack, expect to store to try peddling you its own mobile service.

Instead of acting as an agent for Sprint, Virgin Mobile, Verizon, T-Mobile, AT&T, Boost Mobile, and others, the retailer is now a competitor of those companies.

Radio Shack No-Contract Wireless has launched today, and the retailer hopes it will attract budget-conscious mobile users. The move is also no doubt a way for it to remain diversified as the world of brick-and-mortar retail continues to be dicey.

Of course, Radio Shack did not set up its own cell phone towers around the country. It has become what's called a mobile virtual network operator (MVNO), which means it simply uses another network's service but licenses it and brands it as its own.

In this case, the third-party wireless provider is Leap Wireless, which gained notoriety when it began offering the iPhone for no-contract customers.

The history of MVNOs is hardly in Radio Shack's favor. There hasn't really been a single huge success story. Other major brands like Disney and ESPN have tried it and pretty much all of them ended up scrapping the service.

But Radio Shack has a unique advantage in that its customers already value the store's dominance in mobile phone sales. It has a large following, especially among budget-conscious and low-income families.