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Amaysim delays switching on 4G

Amaysim will not begin reselling Optus' 4G services until next year when there are more devices and a larger 4G network, according to CEO Rolf Hansen.
Written by Josh Taylor, Contributor

Mobile virtual network operator (MVNO) Amaysim will not look to offer 4G services to its 500,000 customers until next year, according to CEO and founder Rolf Hansen.

The online-only bring-your-own-phone operator announced today that it has picked up 500,000 customers on its network in the three years since it first launced back in 2010 reselling Optus services. Since then, Optus has launched its 4G network in Australia, and almost immediately opened up the network to its resellers such as iiNet. Despite having access to the shiny new long-term evolution (LTE) network, Hansen told ZDNet that Amaysim still only offers 3G.

"We're still on 3G. 3G for us still does the job; it's where the mass market sits," he said.

"We'll see when 4G comes. We believe sometime next year it will be ready for mass marketing in terms of handsets and network. Technically we're already hooked up to the whole system, it's more a commercial decision for us when we flick the switch and how we go about pricing."

Hansen declined to comment on whether Optus would be charging more for access to the 4G network, but said that using the 4G network was designed to be more cost efficient, but said that because users would use more data on the 4G network, these efficiency gains were not being seen.

"People are exponentially using more data and the efficiency gains are not fully catching up with it," he said.

This year has seen massive consolidation in the mobile virtual network operator (MVNO) market. Infamously Kogan Mobile was forced to shut down, Red Bull shut down, Woolworths shut down, Pennytel was placed into liquidation, Aldi recently was required to remove its unlimited data plans.

Hansen said he had seen that level of consolidation before with his previous European telco venture Simyo, and he had determined that there are only three types of MVNOs that can succeed: the online-only model Amaysim operates on, the retail backed model like Aldi, and carriers that address small market segments such as Lebara.

"Those three models, generally once they reach scale, and if they're well-funded and executed generally are there to stay," he said.

"Some of them are simply underfunded. Some are underfunded and don't execute properly, and last but not least we've seen some recent examples where they had unsustainable business models.

"You can't sell things cheaper than you buy them for. It may get you some market share in the short term but it is not viable over time."

Hansen said that after three years, Amaysim felt "very comfortable" in its position, despite the market consolidation.

"We've certainly reached critical mass and scale for our business model, and we've reached cash-flow positive for quite a while and we recently turned profitable."

Amaysim employs around 40 people in its management team and between 60 and 70 in its call centre, and Hansen said that it could grow to serve 1 million customers on that level.

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