Optus and TPG Telecom launch Gomo and Felix Mobile, respectively, competing with Telstra’s Belong
Optus just purchased Amaysim, the largest MVNO in Australia. Optus also announced the launch of Gomo, a fully digital mobile phone service targeting customers who prefer straightforward, cheaper phone plans.
But before Optus’ announcements, TPG Telecom (Vodafone) announced the launch of their own fully digital mobile phone service – Felix Mobile.
These moves show a new trend in the telco market – Australia’s major telcos purchasing and launching smaller MVNOs.
Depending on how you look at it, this could be good or bad for consumers. But it could be bad for the MVNO market, as major telcos encroach on that sector, likely shrinking it significantly.
The MVNO market is expected to shrink in the near future
Mobile Virtual Network Operators (MVNOs) were once a promising addition to the telco market. These smaller telcos purchased the major telco networks at wholesale prices, and then resold that network to consumers.
The great part is how cheap and straight forward typical MVNO SIM plans are. Because they don’t have to worry about the infrastructures major telcos have to manage, their overhead is a lot smaller. This enables them offer simple, straightforward, and cheaper plans to consumers.
Between 2014 and 2018, MVNOs grew 29.4 percent – from 23.1 percent of the telco market to 26.9 percent. The major telcos share of the market declined 71% during that same period.
MVNO sector once saw consistent growth. src
And with COVID-19 causing Australians to spend less, MVNOs’ cheaper plans have been a welcome sight to consumers looking to save money.
In fact, the latest ACCC Internet Activity Report indicates that MVNO prepaid subscriptions have grown 12 percent in Fiscal Year 2020, and postpaid subscriptions have grown 15 percent, and this bulk of this growth occured during the height of COVID-19.
Another prime example of how promising MVNOs are is Telstra’s Belong, which accounted for 64 percent of Telstra’s new postpaid mobile subscribers this year, and 100 percent of Telstra’s new broadband subscribers.
You can imagine how attractive these numbers are to the major telco, and how that has led to the acquisition of MVNOs and creation of smaller telcos of their own.
But the bad news is that, with major telcos stepping into the MVNO market, the smaller mobile services they own could hardly be referred to as MVNOs. If that’s the case, it would mean the MVNO market would shrink.
For instance, with Amaysim being purchased by Optus, that means the largest MVNO now belongs to Optus. Venture Insights, an Australian telco/media research and consultancy firm, predicts that MVNO’s will only account for 6 percent of the telco market by 2023, a far cry from the consistent increases that sector has enjoyed over the years.
About Gomo and Felix Mobile
Despite the market effects of telcos acquiring MVNOs and launching smaller phone services of their own, consumers will likely continue to enjoy the cheaper and simpler plans such small telcos offer.
Both Optus’ recently announced Gomo and TPG Telecom’s Felix Mobile will be fully digital. That means they won’t operate call centers and stores. To purchase a SIM plan, you would simply do so on their dedicated apps, and subsequent payments, recharges, and complaints will be done on the app as well.
With such a digital-only platform, you can expect plans to remain affordable, thanks to the reduced costs in running such mobile services.
Here’s a look at what we know of Gomo and Felix Mobile so far:
Optus has not released much information about this mobile service yet. But we know that Gomo has already been live in Singapore, the Philippines, Indonesia, and Thailand, owned by Singtel, Optus’ parent company. The plans in those countries push simplicity and prepaid plans, so we can expect simple prepaid plans in Australia as well. And with Optus opening its 5G networks to MVNOs, we can expect Gomo plans to have 5G access.
- Felix Mobile
TPG Telecom is also yet to launch Felix Mobile, but they’ve released some information. The lineup will include simplified SIM Only plans on the Vodafone 3G/4G network, and eventually their 5G network. Felix Mobile will also be the first mobile service operating with 100% renewable energy.
The MVNO market has attracted major telcos. With Belong bring the bulk of new subscribers to Telstra this year, the other two major Australian telcos have decided to take a piece of the telco market as well.
Optus has purchased Amaysim, the largest MVNO in Australia, and has also announced the launch of Gomo, a fully-digital mobile service, into the Australian market.
TPG Telecom has also announced the launch of Felix Mobile, their own fully-digital mobile service.
Both Gomo and Felix Mobile will offer simplified mobile plans, which could really disrupt the MVNO market. While this may reduce competition in the MVNO market, customers will likely continue to see cheap phone plans from these smaller telcos, even though they are owned by the major telcos.