ROK Entertainment Won’t Buy MVNO Xero Mobile
ROK (LSE: ROK) Entertainment Group said it will not buy Xero Mobile, the MVNO that promised an ad-supported mobile phone service for college students. Rok, which provides streaming TV to mobile phones, said it entered into buy-out talks with Xero in October, but today provided an update, saying: “ROK confirms that it has ended any dialogue with Xero and is no longer in talks to purchase the issued and to be issued entire share capital of the Company.”
In 2006, GigaOM reported that Beverly Hills, Calif-based Xero had lots of ties to Gizmondo, a company developing a gaming device and infamous for its CEO crashing a million-dollar Ferrari. With the help of Gizmondo, it was rumored that Xero may have raised nearly $300 million. There’s no signs of that kind of money now—Xero Mobile, which is listed on the over-the-counter bulletin board under the symbol “XRMB,” registered its last trade yesterday at 0.025 cents a share.
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Feb 29, 2008 9:37 AM
Carl Freer, who founded Xero Mobile, talked about the $300 million figure in two exclusive interviews he gave me in late October 2007 and on February 5, 2008. Here is an excerpt from an article based on the first interview:
“The cost of the phones is the largest cost when you’re starting an MVNO-service. The users need new phones that besides voice can handle data and video for the service to work, and ‘it requires a very large investment to provide millions of students with expensive phones at no cost,’ according to Carl Freer.”
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“That’s where the talk of $300 million came from. When Xero Mobile was started rumors circulated saying that they had pulled in that much capital, but it was only a cost estimate.
‘The MVNO model is dead,’ he said.”
You can read more from my world-exclusive interviews with Carl Freer on my blog The Nordic Link.
Hans