MVNO Monday Q&A – Lebara Group

6 Jul 2015

In the first of a regular series, TeleGeography spoke with Imran Aziz, Head of International Strategy at Lebara Group, regarding the company’s business model and future plans.

When did you launch operations, who is your network provider, and has this partnership remained unchanged ever since?

Founded in 2001, the Lebara Group has built a trusted and established telecoms business with MVNO operations in eight countries: UK, Netherlands, Denmark, Spain, Germany, France, Australia and Saudi Arabia.

The three founders, Rasiah R Leon, Baskaran Kandiah and Ratheesan Yoganathan shared a vision to shake up the international calling market, making it easier for migrant communities to stay in touch with friends and family back home. The name Lebara was coined from the first two letters of each of the founders’ names.

Lebara partners with leading mobile network operators (MNOs) in each territory, and we pride ourselves on building long-term and mutually beneficial relationships with host operators. Lebara has never left a host MNO in any market, which is rare for a multi-country MVNO.

How would you define your key target user market?

As the universal brand for the world’s migrant community, Lebara’s target audience is anyone who leaves home to work or live in another country, as well as people who need to keep in touch with loved ones abroad.

How would you classify your MVNO’s business model?

Lebara is a Light MVNO (i.e. marketing, billing, customer management).

What is the size of your current user base?

Lebara has a consolidated subscriber base of 5.3 million, based on a 90 days active basis.

What was your annual revenue for the most recent year?

Lebara is a profitable company and experienced high single digit growth in 2014.

Which MVNOs/resellers/sub-brands do you see as your main competition?

Lebara’s business is expanding geographically, moving into new sectors and rapidly scaling through its digital activity, so we’re competing on several levels. However, what makes Lebara unique is our understanding of our customers: we know what it’s like to leave one place and travel across the world to live in another country, and we know how to serve migrants’ needs better than anyone else.

Do you consider the government and regulator’s respective positions regarding MVNOs to be conducive to a healthy market, or are there still significant obstacles?

The answer is different for each market, but in a healthy investment climate a light touch works best. However, in emerging MVNO markets there is a need to balance increased competition with a sustainable roadmap to protect consumers and minimise the risk of failed MVNO ventures.

We believe the MVNO process implemented by the Communications and Information Technology Commission (CITC) in the Kingdom of Saudi Arabia is an excellent example of the right approach for governments considering opening up their markets for MVNOs – where the requirement for a licence was for an MNO to partner with an established and experienced brand such as Lebara.

Is 4G important to you, and are you currently able to offer 4G LTE services via your wholesale agreement?

We are working hard to ensure 4G will soon be available for our customers in Europe.

Are you seeing rising competition from MNOs via their secondary, no-frills brands? If yes, how do you intend to defend your market share from these players?

Whilst discount secondary brands may be able to replicate or undercut propositions, they very rarely make any inroads into the migrant segment, since they do not invest energy into truly understanding the needs of migrants. Multi-lingual and first-class customer service, a multi-channel distribution footprint, along with bespoke marketing communications in the hearts of the communities we serve, are the ingredients for success.

Do you have a presence in any other sectors or markets?

Lebara has launched a new entertainment service for migrants, Lebara Play (TeleGeography note: the service went live in June 2015), which combines the best live TV entertainment with free and premium video-on-demand content. We also have a pipeline of innovative products and services, driving Lebara’s evolution beyond telecommunications.

Do you seek to acquire your own radio spectrum and become an MNO? Can MVNOs expand their services to multiple sectors and become major players themselves?

We do not intend to bid for any spectrum. We continue to provide communication services for migrants via our MVNO product, Lebara Mobile, and our recently launched voice and messaging app, Lebara Talk.

As long as an MVNO is servicing a specific customer segment, truly understands and is trusted and valued by this segment, and has focused on premium brand quality, there is an excellent opportunity to sell complementary products under the same brand. That is why Lebara is confident of its plans to roll out complementary products for migrants to make their lives easier.

With OTT apps increasingly supplementing/replacing traditional calls and SMS for voice and messaging, is there a danger that MVNOs will struggle to remain a valid proposition if markets continue to move towards data?

Lebara is at the forefront of demonstrating how an OTT app, Lebara Talk, can complement an MVNO, Lebara Mobile. Our customers can choose to make calls between Lebara Talk customers for free, or they can use their call credit to make international calls using the Lebara Talk or Lebara SIM seamlessly. There’s also the added convenience of cash top-up via Lebara’s network of local stores for customers who don’t have access to a bank account.

Do you perceive a threat from established MNOs which may look to buy out successful MVNOs in order to protect their market share? Do you expect to see the number of players reduced during the next five years, or is there plenty of room for niche operators?

It is natural for an MNO to want to purchase a successful MVNO, and represents a logical exit scenario for an MVNO investor.

As we are witnessing in the MNO space, we expect to see consolidation across the MVNO industry.

Do you have any plans for future international expansion?

Our aim is to continue expanding the Lebara footprint by introducing the brand and our new digital services to new countries across Latin America, Africa and Asia.

Lebara’s long-term ambition is to be the migrant brand of choice by 2020 – so our focus is on rapidly scaling our activities and offering inclusive and accessible products and services, from communications to entertainment and financial services.

What do you regard as the company’s biggest achievements since launching services?

This year we were named Best MVNO for the sixth year in a row at the UK Mobile News Awards, which is a huge achievement.

We are also very proud of the work of our charitable arm, the Lebara Foundation, which funds housing and schooling projects for displaced children in disadvantaged areas of the world.

What advice would you give to a company planning to launch an MVNO?

Begin with the end in mind…!

We welcome your feedback about the MVNO Monday Q&A. If you are a senior executive working within the MVNO sector, and would like to be considered for the MVNO Monday Q&A, please email editors@commsupdate.com

TeleGeography’s GlobalComms Database is now home to the telecoms industry’s fastest-growing collection of MVNO data, covering more than 50 countries and 100 virtual operators. If you would like to find out more, please email sales@telegeography.com

United Kingdom, Lebara Group