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Wireless - Wednesday, March 15, 2006

Free, Ad-Sponsored Cell Phone Service Stateside

Three ex-Gizmondo Europe executives are launching the US-based virtual network operator Xero Mobile, which applies Gizmondo's successful European business to the US. The start-up's pitch: offer mobile phone users free airtime if they'll put up with ads pushed to their cell phones.

The company's prospectus says it will cost $92M to set up the service ahead of its launch, but it anticipates $1.8B before tax, interest, depreciation and amortisation by the end of its third year of operation. One blogger has overheard that the company has already raised $300M from European investors.

News of Xero Mobile's Gizmondo connection comes just weeks after former Gizmondo executive Stefan Eriksson mysteriously wrecked his $1M Ferrari Enzo in Malibu.

Read - Gizmondo Directors Return To US (FT)