Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

MVNOs seek to differentiate, but not all will survive: analyst

Stephanie McDonald | May 2, 2013
Increased competition in the market has had an impact on MVNOs margins, according to Live Connected founder Roshan Mahanama

Yatango, which launched in February, has pushed social media as a way to differentiate, requiring users to sign up through Facebook. The telco also offers a slider-based Web interface that lets customers choose the amount of voice minutes, text messages, data and international call minutes they purchase each month.

"That's more technology driving offers, so the billing systems are becoming very sophisticated now and so the ability to do that and basically customise plans on an individual basis is now relatively easy to achieve if you have the right billing platform," Coughlan says.

"Whether that's good or bad for consumers depends on what happens on the odd month when you go over your plan, which is always the 'gotcha'."

Competition? What competition?

Amaysim's Hansen says its biggest competitors are the big three: Telstra, Optus and Vodafone, with 95 per cent of its new customers come from those telcos.

Hansen says the market has changed since Amaysim launched in November 2010.

"Some of [the MVNOs] were a bit like 'Mini Me's' reselling more or less the same product that you could get from the big guys," he says.

"That has dramatically changed, specifically in the last six months. We now have about 10-12 players competing in the unlimited space that we created with our $39.90 product and new entrants coming into the market, plus [we] hear other players out there that are interested in potentially becoming MVNOs."

With 75 per cent of revenue coming through the Internet and apps, Hansen says Amaysim plans to further develop its online and DIY "experience" to differentiate itself from the basic e-commercie sites of some other MVNOs.

The company is also looking at how to manage the consumer shift from 3G to 4G.

Hansen says that because Amaysim doesn't serve the "super-premium end of the market", the shortage of affordable 4G devices acts as a restraint on offering the next-generation mobile service, with only a handful of 4G-enabled devices currently on the market.

Hansen says Amaysim will also only launch 4G services when coverage is more widespread and the business case is more compelling for itself and Optus.

"We have a certain business model that we need to sell," he says.

"That's going to evolve over the next couple of weeks and months and whether we'll see 4G on the Amaysim brand pre-Christmas or not is not something I can answer right now."

With so many MVNOs now in the market in Australia, Coughlan says not all of them will survive.

"Most of them are selling sim only type plans, so their business risk is now if they start subsidising handsets and the like, that's when the business model [gets into] issues where there's cash outlay in acquiring a customer," he says.

"I think they run on relatively thin margins and so a slight misstep can mean the difference between succeeding or failing."

 

Previous Page  1  2 

Sign up for CIO Asia eNewsletters.