The ad-funded mobile virtual network operator Blyk will cease to run its service and instead provide advertising technology to Orange, the companies announced on Monday.
A Blyk spokesperson told ZDNet UK on Tuesday that Blyk had decided to change its business model in order to increase revenue and scalability. "We don't have to carry the cost of network services [with the new model]," said the spokesperson. "The costs are lower and the revenue is higher."
The company launched as a completely ad-funded mobile virtual network operator (MVNO) in 2007, reselling Orange's services. Users received free calls and texts, up to a ceiling, in exchange for receiving advertisements. Currently, the Blyk service has approximately 200,000 users in the UK. The spokesperson said those users were "free to choose whether to use Orange or another operator" after the Blyk operation closes in August.
Blyk's spokesperson denied reports that its business model had failed, arguing that it can now "scale much faster" by providing advertising services to the operator.
Blyk will sell its technology services exclusively to Orange in the UK. Those will include user-management and advertising-sales technology, said the spokesperson. From the end of August the company will no longer be customer-facing.
Orange's spokesperson declined to give any in-depth details of how the Blyk technology would be used, saying such details would be made apparent "in due course". However, the spokesperson said that "Blyk's business model will be incorporated into Orange packages".
Some Blyk users greeted the news of the closing of the service with consternation.
"It would be nice if you could give a solid reason for shutting down, and personally it seems you may have been planning this for some time, as for some time now you haven't been taking any new customers or giving away any invitation codes," wrote one user in response to a blog post by Blyk co-founder Antti Öhrling on Monday.
Blyk gained new customers primarily through invitation. The company's spokesperson told ZDNet UK that the company had stopped sending out UK invitation codes in February, and that between December and February non-active members' services had been suspended.