MVNO: The movers and the losers

Following on from Telstra’s 4G network announcement, there has never been a more competitive time for budget retailers to try and capitalise on the lucrative mobile industry.

Known as mobile virtual network operators, or MVNO’s, these retailers generally offer prepaid deals based on access to a network powered by a major carrier such as Telstra or Optus.

Over the past few years, more and more of these companies have surfaced offering cheaper deals on data and calls to the public than many of their more established counter-parts.

Some names such as Amaysim and Kogan have been leading the way for years but more recently companies such as Aldi Mobile and Woolworths have entered the fray and disrupted the status quo. With so many brands to deal with, just who are the names to look out for?

International brands arrive

Prepaid mobile deals have been one of the biggest success stories of the mobile industry over the past couple of years and it will come as no surprise then that the international powerhouses in the industry have led the way too in Australia.

Amaysim has perhaps been the biggest winner of the prepaid boom as the Sydney-based firm has formed a successful partnership with Singapore-based Optus in a move that has seen both carriers move from strength to strength.

Whilst Optus has made big gains in media streaming, Amaysim has fully integrated their programmed into the Optus Plus network giving their customers full coverage throughout much of Australia.

Having launched several more satellite names such as Vaya and tied them into the same network, it’s not surprising to see Amaysim grow by 0.5% over the past year.

On the flip side, Aldi Mobile were a rather late entry into the prepaid market but the mobile arm of the German discount supermarket chain has already established themselves as a force to be reckoned with.

Since launching in 2013, Aldi Mobile has used Telstra’s network to provide coverage for their users and the extensive coverage has helped them to become the fastest growing MVNO in Australia.

With Telstra also giving Aldi Mobile customers early access to their new national 4G network, it seems like the race for the top prepaid carrier is going to be an intense one.

Established names struggle

Although many internationally backed MVNO’s have performed well recently, it has been a rough journey for some of the more established names who have yet to make landmark deals.

One of the biggest losers has been Kogan Mobile who has found themselves going from a market leader to a name that is struggling to keep up with the times.

Kogan’s recent problems could have come down to the fact they moved away from a deal with Telstra and put their faith with Vodafone – who are struggling themselves.

Vodafone’s late development of their 4G network has seen customers look for alternatives resulting in a 1% drop in the prepaid sector hurting other carriers who also use that particular network.

The British mobile giant should have their 4G network up and running in the next couple of months but that could still be too little too late for the likes of Kogan to keep up with their rivals on Telstra or Optus backed networks.

Indeed, some have struggled to retain their foothold at the top with TPG having suffered extensively over the past few months. The MVNO has the largest number of customers – 700,000 – for an independent company however this user base has been sharply declining. TPG has lost a 0.8% share meaning that they now only have a 2% share in Australia’s mobile sector.

Waiting in the wings

With there being such fluctuating differences in how established names are performing, it has cast some doubts over whether new entrants could have much of an impact in the prepaid sector.

Surprisingly though, there are several names who are looking to get in on the act and it seems Telstra’s new network could be the lynchpin to this success.

This is down to Telstra granting some networks access to their network a month early with the likes of Woolworths Mobile and Boost having negotiated early deals so far.

In these deals, the MVNO’s have been promised speeds of up to 100mbps and almost universal coverage giving them the platform to try and steal customers away from companies who have not yet switched to a full 4G network.

Optus has also been making additional partnerships with supermarket giants Coles having also recently struck a deal to use the Optus Plus network.

Having scored several large deals to show the English Premier League and the World Cup, Optus are hoping to use their streaming potential to entice customers to sue their platforms through any forms necessary including devices attached to an MVNO.

A change of direction

It would be foolish to think that the major players are going to sit back and let all the budget carriers dominate the industry and get ahead of their larger rivals.

However, the likes of Telstra and Optus have recognised that supporting MVNO’s can help the mobile industry to keep developing and advancing every year.

Although some established names such as TPG and Kogan have struggled to maintain their customer bases over the past year or so, the success of the likes of Amaysim and Aldi Mobile show that success is still possible.

With more and more companies set to enter the fray, the competition is set to continue and improve throughout the whole of 2016.

 

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.