Radio Shack's own mobile network launches

  • 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.