MVNO Monday: a guide to the week's virtual operator developments

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9 Feb 2015

London-based mobile virtual network operator (MVNO) Lycamobile Group is targeting five new international launches in 2015, with the company planning to go live in Hong Kong in the coming weeks. Speaking during an interview with Mobile News, CEO Chris Tooley noted that the expansion is expected to help Lycamobile increase its turnover from EUR1.2 billion (USD1.4 billion) in the twelve months ended 31 December 2014, to EUR1.5 billion in 2015, while increasing its total user base from twelve to 15 million. Lycamobile, which first launched in Switzerland in September 2006, is currently active in 18 markets: Australia, Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, the United Kingdom and the United States.

Spanish MVNO Pepephone has begun migrating its customers from Vodafone’s network to that of Telefonica Espana (Movistar) in a process that will affect around half a million users. Pepephone will send out new SIM cards to all customers over the coming months and is hoping to complete the migration process by the end of June. The virtual operator, which initially launched back in March 2007, signed a four-year contract with Movistar in September last year. Pepephone abandoned its deal with Vodafone after the two parties failed to agree terms relating to Long Term Evolution (LTE) access.

John Hennessy, the CEO of US MVNO Chit Chat Mobile, has revealed that the company is in talks with three potential suitors with regards to a possible acquisition. In an interview with blog prepaidreviews.com, Hennessy commented: ‘We’re too big to be little and too little to be big … In this industry, growth is done through mergers and acquisition … with the high cost of acquiring customers [mergers] would be really beneficial for us.’ While the CEO opted not to divulge the identities of the suitors, he suggested that two are ‘good-sized US MVNOs’, while the third is a non-telecom company from Canada looking to enter the sector. Chit Chat Mobile piggybacks on Sprint Corp’s network, and despite a billing issue that resulted in the company filing Chapter 11 bankruptcy last summer, Hennessy claims that the company is doing very well and has no intention of changing carriers.

Polish alternative fixed line telco Netia has signed a new cooperation agreement with cellular operator P4 (Play) it has announced, with the company streamlining its existing dual-MVNO set-up. As such, following the imminent expiration of its parallel agreement with Polkomtel, all virtual customers will find themselves transferred across to P4’s network. TeleGeography notes that Netia started offering mobile telephony in September 2008 based on an MVNO agreement with P4 (itself a former Netia subsidiary [i.e. Netia Mobile]), although the MVNO voice service was aimed squarely at business users. In Q3 2009, the scope of this cooperation was expanded to cover resale of P4’s mobile broadband services, but recently the service has been scaled down. At the end of September 2014, Netia’s mobile customers had fallen to 24,191 (voice) and 18,032 (data), down from respective totals of 42,304 and 25,344 twelve months earlier.

In an interview with the online telecoms journal Mobilenet.cz, the chief executive officer of Czech MVNO Lama Mobile, Marek Fabian, said that the company was adding ‘hundreds of new customers a week’, although he declined to provide details on the total number of users on the firm’s books due to ‘fierce competition and inconsistent metrics for determining the overall database’. The CEO says that his company’s cost-saving packages – LAMA offers 200 free minutes and 200 free SMS for CZK199 (USD8.15) per month – give the MVNO a particular advantage, noting too that a high proportion of users are taking its SMART LAMA tariff which includes 150 voice minutes, 50 SMS and 150MB of data for CZK249 per month. Lama Mobile, part of the Lama Energy Group, uses Vodafone Czech Republic as its host network operator.

The UK’s Dixons Carphone Group has confirmed that it has agreed an MVNO partnership with network operator Hutchison 3G UK (Three). The new network is due to launch in the spring, with the retailer expected to allow its subscribers to tailor their own packages according to their changing requirements.

Brazilian MVNO Porto Seguro Conecta ended 2014 with a total of 271,380 subscribers, up from 101,116 one year earlier. Insurance company Porto Seguro was the first company to receive an MVNO licence in Brazil, after being awarded its concession in November 2011. The virtual operator piggybacks on TIM Brasil’s network, and currently offers connectivity in Santos, Campinas, Rio de Janeiro and Sao Paulo. According to TeleGeography, Brazil’s MVNO market remains seriously underdeveloped, and despite its modest user base Porto Seguro Conecta is the country’s largest reseller by subscribers.

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