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All change in the cut-price telco world

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As two major low-cost mobile providers set themselves up in Australia, Channel 7 is out to buy the rest of cut-price IP phone provider Engin. So what’s going at the cheap end of the industry?

On today’s program I talk to Rolf Hansen, CEO of Amaysim, a cut-price mobile virtual network operator (MVNO). MVNO’s are basically wholesale mobile customers, in this case a customer of Optus.

There’s nothing new to MVNOs, of course. Boost Mobile and Crazy Johns are a couple of examples, but most mirror the cap-plan approach of the larger telcos. There’s very little point of differentiation.

The Amaysim approach, which has worked to good effect in Europe, is based on simplicity — no contracts, no handsets and low fees. Lycamobile, a recent arrival on our shores from the UK, has a similar approach, targeting low-cost international calls for Australia’s extensive immigrant market, myself included.

These companies focus on offering better value through simple products requiring less support. As you’ll hear from Danish industry analyst John Strand, the business model is tried and tested, attracting a lot of new customers, quickly.

This all sounds like great news for consumers, but what about the industry? Will they cannibalise revenues for the incumbent telcos? Ovum senior analyst Nicole McCormick says that it’s not the job of MVNOs to be destructive and the wholesale providers can always pull the plug if it’s doing damage.Tech Budgets 2019: A CXO’s GuideLearn where business leaders will spend their tech budgets in 2019 and what their top priorities are. Also get valuable advice for putting your IT dollars to good use.Sponsored by Google Cloud Platform 

So what impact will these new players have on the mobile industry? If the upshot is that prices come down and plans are simplified, it has to be a good thing. Perhaps we’ll see more transparency in telco advertising. We can only dream.

Also on today’s program I give my thoughts on why Channel 7 is so keen to buy up the rest of Engin. It already has a controlling interest. Listen in for my views on where they might be heading.

First published on ZDNet

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