The great Aussie mobile race

As Telstra, Optus and Vodafone look to hook their customers on the speedy 4G drug, where do mobile virtual network operators fit into the equation?

The current scale and breadth of mass-marketing being executed by Australia’s three mobile network operators (MNOs), all champing at the bit to hook their customers on the speedy 4G drug, has the intensity of the major political parties at election time (bar the baby-kissing, but if it meant another million subscribers, I wouldn’t put it past them). 

Alongside that, the carriers are (to varying degrees) tying in promises of customer service that would have angels weeping with joy. Given that telco customer service is normally something you’d equate to weeping with rage, it’d be great for everyone concerned if these promises turned into reality.

So, where do mobile virtual network operators (MVNOs) like amaysim fit into the equation? And didn’t most network resellers bite the dust in the great market consolidation of 2013?

Not exactly. Sure, there were some high-profile MVNO crashes last year and others have changed their plans pretty dramatically, seemingly flying in the face of data usage now being the main game in a world where voice and text are commoditised. That said, there are still a few MVNOs flying the flag and differentiating themselves in the current market (here’s where I’ll do the obligatory chest-beating and remind you that amaysim has amassed well over 600,000 active customers in three and a half short years, with not one of them locked into a long-term contract).

European market movements – a story now being played out in Australia

This is a pattern I – along with the founders of amaysim who initially had success building up simyo as Europe’s largest MVNO – saw in the European market in the period from 2005 to 2010.

In Europe, carriers opened up their networks to MVNOs to great effect. There were two types – those that homed in on one demographic (e.g. youth) or those that took a more mainstream appeal approach (as simyo did). You can see this reflected in the Aussie mobile market.

What also happened in Europe was that once the low-cost model really took off, copycats came in with their own purely price-based plays. This period was then followed by some intense consolidation as the market matured, which we’ve now also seen in Australia over the past 12 months or so.

What’s next?

In the Australian market, attempting to take the fight to the incumbents based on network claims and using traditional marketing tools just won’t work, especially for challengers who sell mobile services as an add-on to their core fixed broadband offerings. On the flipside, competing on price alone when data usage is skyrocketing is a fast-track to obscurity. On that note, offering minimal data inclusions and a sliding scale of data-driven bill shock is also no way to shape a competitive landscape.

Differentiation is key. That differentiation needs to come from a superior user experience. By that I mean recognising that, in an always-on world, customers don’t want to call as much anymore, but rather want solutions at their finger-tips. That means simplifying online DIY and adopting a mobile-first strategy across the board. After all, if we’re in the game of selling mobile services; it makes sense that smartphones should be the first choice interface for account management.

For any subscription-based model where customer loyalty is critical, user-experience-based superiority is a golden arrow. On its own it doesn’t guarantee success, but in an increasingly level market, it’s a strong differentiator and one that dinosaurs of several industries would do well to pay attention to.

Julian Ogrin is the managing director of amaysim Australia