Amaysim buys Vaya in $70m deal – What it means to you

Intro – 60 second guide

Here are the key findings from the recent news story of Amaysim purchasing Vaya, under a plan to increase their user base and business growth through to 2019, there are more details in the article below.

  • Vaya is an Australian based MVNO currently providing mobile services to 140,000 users, backed by the Optus 4G Plus network.
  • Established in 2011 and operating digitally online with no retail stores, Vaya are an income positive company which made for an attractive merger deal with Amaysim.
  • Amaysim is consolidating for future growth in a rapidly contracting marketplace, it only makes sense for them to merge smaller companies under their brand.

What Vaya and what does this $70m deal include?

Vaya is an Australian MVNO which provides low-cost prepaid SIM packages to Australian consumers. Vaya employs 10 Australian staff with an additional 30 located in their contact centre in the Philippines.

Vaya operates in the lower end of the Australian mobile service telecom industry, much the same as Amaysim does which is why this deal happened. Amaysim buying Vaya will allow them to grow more rapidly and reach their expansion targets by 2019.

Both Vaya and Amaysim use the Optus 4G Plus network, to provide both connectivity and service to their users.

Vaya was an attractive company to purchase as they were growing in market share, were an online only player which means they have no retail store overheads and the vast majority of their users are on prepaid plans in the range of $18 to $25 per month.

The acquisition has been valued by industry experts at around $70 million with equity valued at $20 million. Vaya currently holds $50 million of liabilities to Optus, which are reported to be payable over the coming two years.

Vaya presented an attractive and financially enticing opportunity for Amaysim, in line with their long-term strategic goals, therefore making sense for them to pursue this deal.

Why is this deal different than Yatango closing?

Vaya unlike Yatango which went into administration due to debts and the general poor manner in which they operated their MVNO business in Australia, are a solid company and thus a merger deal was entered into between themselves and Amaysim.

Vaya was established in 2011 and provides prepaid SIM mobile services to their users along with voice calls, texting, mobile data and fixed-line broadband.

Vaya is a pure digital online business which means they don’t operate any retail store fronts which Telstra and Optus do, which allowed them to keep their overheads low and enjoy healthy profit margins.

While Amaysim focuses on the mid-price range of the Australian market with their prepaid and SIM-only services, Vaya operated at the lower end and casual mobile phone users market.

In the past two years alone, Vaya has experienced healthy growth with their current subscribers at around the 140,000 users mark, making for an attractive buyout from Amaysim, an experienced operator in the MVNO scene.

Do mergers happen a lot to Australian MVNOs?

In the last few months, there have been a lot of mergers and companies closing such as Yatango and Crazy Johns, two MVNOs closing their doors.

We have also seen Kogan rising from the dead once again, this time in a partnership deal with Vodafone Australia and one of Australia’s largest ISP’s TPG, entering into a partnership deal with Vodafone.

In most circumstances mergers are good for the MVNO users without any downsides, as with a prepaid plan you are not locked into one Teleco and if you are not happy with the deal or service received, you can easily walk to a different provider.

How will the Vaya partnership affect customers?

If we go by the current news reports released by both Amaysim and Vaya, then we are lead to believe that it’s business as usual and there will be no changes to either the service or prepaid plans currently provided by Vaya.

Both companies are resellers of the same Optus 4G Plus network and Amaysim has announced that for all customer support and billing services, Vaya will remain the go-to contact for existing users.

This announced merger is more about Amaysim gaining an increased market share to grow and expand their own business, rather than buying up a non-profitable company which is floundering and providing a poor user experience.

This business partnership deal will enable Amaysim to position themselves in a consolidating marketplace and allow them to enhance the manner in which they scale their company in the years moving forward.

As reported, Amaysim plans to keep the Vaya business brand separate from their own operations and to continue running as per usual.

“This is a rare opportunity to significantly grow our number of subscribers on the same network and in a complementary market segment,” – Amaysim chief executive Julian Ogrin

Will Vaya mobile be forced to close?

No. As stated by Mr Ogrin from Amaysim, Vaya will continue to operate and provide service to their existing subscribers as per usual with no prepaid plan changes, service alterations or current pricing points to be affected.

Can existing Vaya customers keep their number?

The simple answer is Yes, it’s as easy as that. Due to legislation in Australia, you won’t loose your existing mobile phone number and it’s business as per usual for Vaya.

If you are unhappy for any reason and want to move to a new MVNO on a different prepaid plan, you can simply inform your new provider and they will port your number over to them, from your previous one.

In Conclusion

Even though Amaysim has taken control of Vaya through this business merger, it’s nothing to be alarmed at if you are a current Vaya customer.

Vaya will remain operational and continue to provide the exact same services, prepaid plans and customer support as they have been in the past, but if you as a user are unhappy with this merger deal, there are other MVNOs available such as Boost Mobile.

Boost Mobile operate on the Telstra 4G network and offer comparative lower end prepaid plans on the similar price points as Vaya does. In the Australian market there is lots of choices and with prepaid you are free to move to a better deal at your time of choosing.

 

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.