AusPost ready for the telco jump

With the hoopla around Ruslan Kogan's entry into the Australian mobile market dying down, perhaps it's time to consider the next big flashpoint in the sector – the long awaited debut of Australia Post as a mobile virtual network operator. And the launch could come sooner rather than later in the New Year.

Talk of AusPost launching a full scale assault on the telco market  picked up late last year after former Macquarie Telecom and Optus executive Maha Krishnapillai joined the company's retail services division, taking charge of its existing telecommunications business.

AusPost's existing telco business consists of selling sim cards and pre-paid mobiles but there is ample room for growth and the company has been actively recruiting talent with mobile virtual network enabler (MVNE) experience in recent months.

It has already added Vodafone Hutchinson Australia-owned mobile phone retailer Crazy Johns' networks chief Jonathan Withers and his second in command Heather Trieu to its ranks and is currently looking to make another major hire.

A source told Technology Spectator that AusPost is in the detailed business case phase and a launch could happen in the first half of the calendar year.

The launch will of course be reliant on how quickly AusPost can seal a wholesale deal with an operator. But will it be Optus or Telstra?

Optus may have a head start in the mobile wholesale space but Telstra has given us plenty of signs that it is thinking outside the box – the acquisition of Adam Internet, licensing deal with prepaid carrier Boost Mobile – and making a bigger splash in Optus and VHA's mobile wholesale turf has to be on the telco's agenda.

Kogan Mobile may be the first MVNO to make full use of Telstra's 850/2100MHz network, which spans 97 per cent of the population, but it is unlikely to be the last. In fact, AusPost could follow Kogan's footsteps and while Telstra has distanced itself from the Kogan Mobile deal a tie-up with AusPost could be extremely fruitful.

It will also be a cosy reunion of the two arms of the Postmasters General Department, separated in 1975, only to be reunited at a time when the postal and the telecom industry are undergoing a fundamental change.

Telstra's coverage may match AusPost's substantial natural footprint but the final equation doesn't solely boil down to coverage. AusPost will, at some point next year, enter a substantially saturated market, so the issue of differentiation will be foremost on Krishnapillai's mind.

The company has a formidable physical presence but the market will be keen to see what other content and services it can bundle into its offering. Again, Telstra may prove to be a good fit here but Optus does offer earlier access to innovation through its 4G services.

The MVNO aspirations are one tip of a three-pronged strategy initiated by AusPost CEO Ahmed Fahour, which also includes the launch of the Digital MailBox and developing its financial services and banking portfolio.

With Digital Mailbox up and running, 2013 could be the year that AusPost's ambition of developing a broader communications platform takes concrete shape. Apart from its expansive distribution and logistics capabilities Fahour and Krishnapillai hold in their hands one of the most recognised and trusted brands in Australia.

This is the sort of brand equity that is absolutely invaluable and with Krishnapillai categorically ruling out any intention of turning AusPost into a carrier in its own right, it looks like the company is getting closer to start its life as a virtual operator.