Mobile's low-cost opportunity

Mobile's low-cost opportunity

Summary: How will the emergence of low-cost mobile virtual network operators, like Amaysim, impact the operating margins of the big carriers? Is it a threat or an opportunity?

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TOPICS: Mobility, Telcos, Telstra
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How will the emergence of low-cost mobile virtual network operators, like Amaysim, impact the operating margins of the big carriers? Is it a threat or an opportunity?

One of the conclusions from the recent State of the Mobile Nation report from Macquarie University, was that most mobile users are paying more than they want to for their phone service. Why? Because they have a fear of overspending and being hit with astronomical excess charges.

Yet Amaysim — which, incidentally, funded the report — has shown that you can make a decent margin by lowering prices, getting rid of confusion, having a user-friendly online presence and limiting the product range.

In the aviation industry, we've seen low-cost carriers challenge the revenues of bigger players, forcing old-style airlines to restructure, lower their cost base and simplify processes. Could the growth of mobile virtual network operators (MVNOs) see the big carriers in the telco space be forced to do the same thing? If so, where is the Telstra equivalent of Jetstar?

In this edition of Twisted Wire, Rolf Hansen, CEO of Amaysim, talks about the factors driving the success of his business, and we ask why Telstra hasn't grasped the opportunity to launch their own low-cost division, as a stepping stone to a new mode of operation.

As always, you can have your comments featured in future editions of Twisted Wire by calling our feedback line: 02 9304 5198.

Running time: 30 minutes, 51 seconds.

Topics: Mobility, Telcos, Telstra

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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6 comments
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  • Optus has already responded with https://www.optus.com.au/shop/prepaidmobile/connect4less. Still has flag fall but the prices are very comparable to Amaysim. They still make it look like I need a degree in Law to understand the plan.

    Telstra has http://www.cynergysoftware.com/wp-content/uploads/2011/06/helpButton.jpg

    The problem is with overheads, many different plans and you need to filter out the rubbish. Telstra web site is the worst as they have http://telstra.com.au/mobile-phones/prepaid-mobiles/rates/#tab-simplicity which gave me no information that I want which, http://www.amaysim.com.au/ has almost all there is to know with the exception of international which would not fit on a home page.

    I am with Amaysim with my occasional used personal phone and will port other devices over in due course.
    SW_Victoria
  • I've been on the TPG PAYG mobile plan for the last 2 years, and still beats Amaysim.
    desudesu3
  • I was with TPG with net, didn’t like customer service. Most of my phone calls are under 1min so an average cost for me would be slightly higher for TPG. On the other hand the txt would be slightly cheaper.

    Go for the higher customer service over saving maybe $1 month.
    SW_Victoria
  • hi, love the podcast, even so im on a cap plan with a iphone its good to see more and more customers know about amaysim and other PAYG plans, i think its good for the customer because they have a option, i dont think alot of people know anything about how much there credit is worth and even if they did they dont want to pay the upfront cost of a handset, like you said they are also scared they will overspend, also even so im with telstras offers a simplicity plan i think it would be smart(or atleast one of there wholsales) to start a PAYG plan but if it only has access to nextG in the next 3 years when 4G will be more widespeard optus resellers will look more better, also even so amaysim providers data packs i think they need to work with optus to reduce there PAYG data, 5c per MB is a bit to much
    tess1988
    • also just to add i send about 200-300 text per month and it would cost me up to $34, compared to say upfront cost of a iphone $799/24=$33 + $34 text messages = $67 which is about the same then a plan and thats not included data(usually under 500MB) and calls(which change over time).... but with that all said im really liking what amaysim and TPG offer with there PAYG plans
      tess1988
      • Boost $40 Prepaid

        Amaysim is a good deal at $39.95 unlimited but doesn't include 1300 or 1800 numbers. The Boost Prepaid $40 Unlimited includes these as well as 3GB of data each month. I have my wife on this. Saving $29 a month over her old $69 Optus unlimited plan (that also didn't inlcude 1300 or 1800). With Auto Recharge, it's even easier to pay than her old account! I have told lots of people about this but many want a plan to get the latest phone. They don't seem to realise they are paying for the phone many times over on their plan.

        My step son ran up $3000 in a few months on a "Capped account. We have him on the Boost $40 Prepaid now & there will never be any expensive surprises again. I'm on Boost Long time $70 for 180 day expiry credit. I mainly use it to call the wife & as Boost to Boost is free calling both my wife & step son doesn't even eat into the credit at all.
        wazza61