Upstart Powers Virtual Network Operators

America has plenty of cellular carriers, ISPs and long-distance companies. To enable more communications companies in an already saturated and beleaguered market may seem ludicrous. But this is Paris Holt’s multimillion-dollar gamble: Blockbuster retailers and other prolific companies carry the brand name and marketing muscle to win over scores of subscribers.

Holt’s company, Unified Signal (www.unifiedsignal.com), has developed a platform that enables retailers to become virtual network operators (VNOs).

Much like a traditional reseller, Unified Signal signs wholesale agreements with national carriers to buy big blocks of voice minutes and Internet access for a discount. The company announced Thursday that it has added AT&T Corp. (www.att.com) to its list of wholesale suppliers. But its the back office and customer care functions that make it possible for retailers — as well as independent telecom sales organizations and other companies — to resell Internet access, long-distance and cellular services by helping them acquire, provision, bill and manage their customers.

The VNO is a compelling model (earning Unified Signal $2 million more in financing last October), but one that has yet to be proven. In the mobile market, for example, the only VNO is Virgin Mobile USA, a joint venture of Sprint PCS (www.sprintpcs.com) and Virgin Mobile (www.virginmobile.com), which said Thursday it will begin introducing Sunday its wireless telephone service targeted at people 30 and younger, with nationwide distribution expected by the end of August.

Holt says Unified Signal has a deal with a multibillion-dollar retail partner, which he expects to name in 30 to 60 days. The company’s preoccupation with the retailer’s pilot has pushed out earlier partner launches.

During an interview last August, Holt said he expected his partners to acquire 500,000 customers within two years. Of three channel partners he publicly named last year only one has integrated its systems with Unified Signal’s platform. In fact, the company, Internet direct marketer Impulse Marketing Group (www.impulsemg.com) finished the process only about a week ago, Holt said.

Last year Holt also named two other partners, a prepaid wireless company and a master agent representing other independent telecom sales organizations. But those companies have not integrated their systems with Unified Signal.

In all, Unified Signal claims eight channel partners and 35 companies on a waiting list, Holt said.

"I never thought in my wildest dreams we would ever be so successful," he added.

To be sure the company truly will not realize any measure of success until its partners start amassing subscribers. In the meantime, Unified Signal shares the characteristics of many other high-tech startups — brimming with promise and short on cash flow.