Nu Mobile and Circles.Life – Can Telco Get Any More Competitive

Nu Mobile and Circles.Life enter competitive telco market

Australia’s telecommunications market already has stiff competition, and it’s going to get even stiffer. Major telecommunication companies are already struggling with losses, and two new competitors have just entered the market already crowded market – Nu Mobile and Circles.Life.

Macquarie Group’ launches Nu Mobile

Recently, Macquarie Group launched a telco called Nu Mobile that will pair its phone plans with used smartphones.  Like other players, including Amaysim and Kogan, the MVNO will resell the Telstra network.

Used mobile deals are a bit questionable to Australians. However, because Macquarie Group already has more than a million leased smartphones in its possession, the financial giant may be in a unique position to launch its new venture – Nu Mobile.Australians don’t like used phones.

Nu Mobile’s used phone contract scheme is still questionable, considering Australians in general are not big fans of used handsets. Source: Whatphone

Nu Mobile currently offers phone plans with reconditioned iPhones and Galaxy devices. The company plans to offer Apple devices – iPhone 7, 8, and X – along with Samsung Galaxy S7 and S8s. Consumers can purchase these devices outright or pay for these over two years interest-free. These devices come paired with a 12-month warranty. In addition to these, Nu Mobile will allow customers to either return their mobile or swap it for another one at any time.

Current Nu Mobile plans range from $10 per month with 1GB (Gigabyte) of data and $30 or more a month with 40GB of data. All plans come with unlimited voice and SMS, and their larger plan even comes with a one-off 80GB data that can be used anytime during the life of the plan.

Some market watchers have greeted Macquarie Group’s new venture with enthusiasm and describe it as an “innovative” move.

Circles.Life  ready to enter Australia

Singapore-based Mobile Virtual Network Operator (MVNO), Circles.Life,  plans to launch its services in more than five countries, including Australia, in the next 18 months. The company will invest more than $50 million in each market.

The telco has already signed agreements with major networks covering the widest regions in Australia, and will introduce a 100 percent digital telco experience in these markets.

As new telcos emerge, current telcos struggle in the competitive Australian market

In the meantime, Australian telcos that are currently in the market are taking a beating. The competitive nature of the market is great news for consumers as more options generally mean cheaper plans and more data. For the telcos in the market, however, staying competitive yet profitable is a constant struggle.

  • Vodafone Australia posted $124M loss in 2018
    Vodafone Hutchison Australia (VHA) announced that it had passed the six million mobile customer mark in 2018. The company claims that its total mobile customer base has grown by 211,000 customers to 6.02 million, a 3.6% increase year-on-year. Its postpaid customers increased by 2 percent to 3.45 million, while prepaid customers grew six percent to 2.2 million. The customers on Kogan Mobile and Lebara, both Vodafone resellers, increased 5.3 percent to 356,000.However, Vodafone has experienced some losses lately. During the last year, Vodafone Australia launched fixed-line broadband that would see the company release retail NBN plans. The monthly average revenue per user (ARPU) was down 2 percent to AU$37.45 for customers who strictly used Vodafone’s own offerings. While adding in Kogan and Lebara, customers saw ARPU decrease by 4.4 percent to AU$35.52.
  • Telstra racks up 3200 job losses to reduce operating costs
    Telstra has also experienced losses. Since mid-June last year, Telstra has cut 3200 staff from its massive T22 restructure. The telco’s staff, infrastructure, and application purge have accelerated, with 6000 of 9500 slated job cuts by the end of the financial year.
    Telstra downsizing estimates by 2022
                                                                Telstra to axe 8000 jobs by 2022. Source
    Telstra’s T22 simplification and downsizing strategy brought $700 million in expenses into the 2019 financial year. The costs break down into $200 million for labour shedding and $500 million in write-offs for legacy systems and hardware, replaced by modern technology.

Final words

Overall, the Australian telecommunication market is highly competitive these years. The entrance of Nu Mobile and Circles.Life  will add to this competition, especially if consumers welcome their services as  affordable and attractive.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.