MVNO Monday: MVNOs World Congress Special

27 Apr 2015

UK-based MVNO giant Lycamobile Group has soft-launched in Hong Kong, CEO Chris Tooley informed the audience at last week’s MVNOs World Congress, which took place in Nice, France. Admitting that ‘Lycamobile can be a mystery’, Tooley explained the company’s overarching strategy and dropped hints regarding future plans. Reflecting on the unique challenges of the MVNO market, he noted that virtual operators should be prepared for ‘ten no’s before you get a yes’, but claimed the group has ‘discovered a seam of gold and we are mining it’. Going forward, Tooley says Lycamobile is in a position to launch in Tunisia before year-end, following the confirmation by Habib Ben Lallahom – executive director of wholesale MVNO business at Tunisie Telecom – that the venture is officially open for business. Elsewhere, in Latin America, Lycamobile is currently in negotiations in three separate countries, including Brazil. With regards to the Hong Kong launch, TeleGeography notes that, according to new website calls to China are priced at just HKD0.09 (USD0.01) per minute.

Closer to home, Geoff Smyth, Head of Telecommunications for The Post Office UK, has confirmed that the postal service’s long-awaited MVNO unit is currently undergoing a ‘friendly user trial’ by 3,000 of the company’s employees, and is likely to launch on a commercial basis in late-May/early-June this year. The 4G MVNO, which will piggyback on EE’s network and uses Transatel as a mobile virtual network enabler (MVNE), intends to leverage the Post Office’s 11,780 branches for distribution purposes. The new MVNO’s tag-line will be ‘Pay Less as You Go’, and it will be targeted at the lower socioeconomic strata. Smyth says that the venture’s success will rely on its ability to ‘trade in a nimble fashion’ and called his ‘absolutely engaged sales force’ the company’s ‘secret sauce’.

Meanwhile, Carphone Warehouse Ireland is poised to switch on its capacity-based MVNO in July this year. Managing director Peter Scott told the conference delegates that his company’s long-awaited virtual operation – conceived in the wake of Hutchison Whampoa’s takeover of O2 Ireland – is expected to launch in around 100 days’ time. With 120 retail stores in Ireland and twelve planned standalone MVNO stores (situated inside the branches of another retailer), Scott noted that the new player’s chief strength is its ‘ready-made bricks-and-mortar assets’, which allow it to ‘ably distribute MVNOs without adding significant cost’. Pitching the virtual operator as a ‘capacity-based MVNO not a wholesale MVNO’, Scott declared that paying a fixed price from day one – for 15% of Hutch’s capacity –, forces the company to ramp up its user base straight away, and allows it to potentially offer promotions such as ‘happy hours’ and ‘free days’.

Defense Mobile, a new US MVNO aimed at the 1.4 million Americans on active military duty and their immediate families plus veterans, has confirmed that it is now operational, piggybacking on the networks of AT&T Mobility, Sprint Corp and Verizon Wireless. Speaking to TeleGeography at the conference, Head of Operations Stan Simpliciano revealed that the new virtual operator expects to conclude a fourth wholesale deal with T-Mobile US before year-end, meaning it has partnered with all four ‘Tier 1’ mobile network operators. The Stamford, Connecticut-based start-up intends to offer no-contract 4G service rates that are around 30% to 40% less than they would pay elsewhere. TeleGeography notes that Defense Mobile’s board of Directors and Advisors includes a former chairman of the Joint Chiefs of Staff, two of the longest serving Navy SEALS, five FLAG Officers, a former Assistant Secretary of the Air Force, a White House Fellow, the co-founder of Virgin Mobile USA (Peter Lurie) and the co-founder of Simple Mobile (Phil Prouty).

Elsewhere, Enrique Lopez-Negrete, CEO of Mexico City-based MVH Telecom, has named July this year as the month in which its partner, retail group Chedraui, expects to launch its long-awaited MVNO on a full commercial basis. The latter is one of Mexico’s largest retailers, with 217 stores nationwide as of 1 March 2015, and the company hopes to succeed in a market where so many other companies have struggled to make an impact. The virtual network was soft-launched in November 2014 and currently boasts 30,000 users, of whom 25,000 are company employees. Lopez-Negrete noted that Chedraui will likely face stiff competition in the form of fellow retail giant Walmart Mexico (WalMex), which expects to unveil its own service within the next twelve months. Interestingly, the executive suggested that recently launched Mexican MVNOs Virgin Mobile Mexico and Mas Tiempo have both struggled to date, with fewer than 10,000 users apiece.

In other MVNO news, as had been widely predicted Google Inc launched its new MVNO service – ‘Project Fi’ – on Wednesday 22 April, basing the operation on a model that charges users only for the data they actually use each month. Running on the networks of Sprint Corp and T-Mobile US, the search engine-turned telco is offering its MVNO customers the option to share data plans, plus other features including: flat rate over-usage fees on a per GB basis; ‘free’ voice calls and SMS in the US; and low-rate international calls, akin to the Google Voice service. Looking to disrupt the US cellular market, already locked in a fierce price war, Google unveiled its long-awaited phone service putting it directly in competition with Verizon, AT&T and other wireless service providers. Detractors have suggested that for now though, Project Fi could be considered an ‘experiment’. It will be available only to people using Google’s Nexus 6 phone, limiting its reach. Google’s new MVNO offer is a hybrid service; it will use Wi-Fi networks to route phone calls and data, which could further reduce subscribers’ bills, it says. Whilst some rivals charge upwards of USD100 per month for their services (including voice calls and mobile data), Google is offering its plan at USD20 per month for basic voice calls/SMS, plus a flat USD10 per GB of data.

South Africa looks set to get a new MVNO from 1 May 2015, with the newcomer in question me&you mobile, promising to ‘turn the traditional mobile market model on its head’. Headed up by CEO Brett Howell, me&you mobile is backed by Durban-based Ignition Group and is looking to offer end-users more flexibility and control, by not locking them into a 24-month contract. Announcing the start-up’s ‘BeUnordinary’ campaign via its Twitter account, the reseller is looking to take on the established heavyweights in the local market with its low-cost, SIM-only offerings starting from just ZAR0.39 (USD0.032) per minute, piggybacking on Cell C’s infrastructure. Data rates are also slated to be ‘competitively priced’, it says, noting that the MVNO’s platform is being provided by another Ignition Group subsidiary, MVN-X, led by former Virgin Mobile South Africa CEO Steve Bailey. me&you mobile is looking to target customers in the higher-income demographic who do not want to be committed to a long-term contract, and it hopes to sign up between 15,000 and 20,000 users in its first year.

Megacable of Mexico has announced its intentions to launch as an MVNO by the end of this year, or in early 2016, according to general director Enrique Yamuni. The cableco is reportedly keen to expand its reach in the country by way of a quadruple-play offering, with Mr Yamuni confirming that talks are underway with mobile network operators (MNOs) Movistar or Telcel over the possibility of leasing network capacity from them. In February this year, MVNO Monday reported that Megacable had entered into dialogue with AM-backed Telcel regarding wholesale MVNO terms, as it plots a return to the MVNO sector. The Guadalajara-based firm became one of Mexico’s first virtual operators back in October 2011, when it launched over Movistar’s network, but struggled to gain traction in the market.

UK insurance firm Personal Group has acquired Daventry-based MVNO Shebang Technologies for GBP1.3 million (USD1.9 million), which it will now integrate into its newly created mobile arm, Personal Group Mobile Limited (PGM). Shebang, which had offered services hosted by MNO Hutchison 3G UK (Three), had been in administration since 2012 and successfully fought off a winding-up order in February 2013. The deal gives PGM access to some 10,000 Shebang customers who will now be offered devices and airtime using Shebang’s MVNO through its ‘salary sacrifice scheme’, where members of staff give up part of their salary in order to receive tax or National Insurance (NI) savings. The insurance group claims it will be able to give customers a 32%-47% reduction on ‘standard’ retail prices which will include 24-month contracts and smart devices from the likes of Apple and Samsung.

Chilean MVNO Virgin Mobile Chile is keen to start offering post-paid service plans, CEO Juan Antonio Etcheverry is quoted as saying, although he stresses that the firm aims to do this without the need for customers to be tied to contracts. Etcheverry told STNews that the strategy for what he terms ‘antiplans’ surfaced last year in the wake of a decision by the Department of Telecommunications (Subtel) to cut access charges, at a time when Virgin Mobile was ‘surfacing’ from an operational point of view. The MVNO has amassed a total of 310,000 users to date, with Etcheverry noting that the company wants to boost this to 400,000 by the year-end, of which 50% will be post-paid. A separate unconfirmed report suggests that the MVNO is also looking to offer LTE in the near future.

Czech MVNO SAZKAmobil, which offers wireless services over the network of Vodafone CR, plans to launch its first post-paid tariff, starting 4 May, offering 1,000 minutes of voice calls to any network for CZK377 (USD14.8) a month. TeleGeography’s GlobalComms Database notes that betting firm Sazka is one of the more recent groups to have entered the mobile reseller market, launching SAZKAmobil in February 2014 via its tie-up with Vodafone. The start-up hit the ground running, amassing 70,000 customers within the first few months of operation and breaking the 100,000 subscriber barrier in November 2014, just nine months after its launch.

Kenyan MVNO Equitel says it has signed up more than 600,000 subscribers in its first six months of operations. Airtel-backed Equitel launched in September 2014 via a partnership deal with Nairobi-based Equity Bank and passed the 400,000 subscriber mark in March. Apparently more than 70% of people using the MVNO’s new service take both mobile and financial services, it said.

Finally, UK-based retailer Dixons Carphone Group is the latest firm looking to offer MVNO services in the country, using Hutchison 3G UK (Three) as its host network operator and branded iD. The new iD service is expected to be launched next month with Dixon Carphone promising to offer users the ‘cheapest’ 4G network in the UK, with increased contract flexibility compared to rivals, and free roaming in 22 countries. The news follows the February announcement that Dixons Carphone Group had inked an MVNO partnership deal with Three.

We welcome your feedback about MVNO Monday. If you have any questions, topic suggestions, or corrections, please email