Australia’s Amaysim is preparing to bring its low-cost mobile virtual network operator (MVNO) model to the US, the company’s CEO has revealed.
Amaysim, which today turns three years old, now has 500,000 customers in Australia, making it the largest MVNO in the country, the company’s CEO Rolf Hansen told Computerworld Australia. Amaysim became profitable two months ago and is on track to make $100 million in revenue in the fiscal year ending June 2014, he said.
Now, the company has set its sights on expansion both at home and abroad.
Hansen and the other co-founders of Amaysim came to Australia after the success of an MVNO in Europe called Simyo. Here, Amaysim has undercut the prices of major telcos.
For about $40 monthly, customers can get 4GB of data with unlimited calls and SMS messages on the Optus network. Compare that to the leading carrier Telstra, whose cheapest BYO plan is $50 and includes only 1GB of data and $600 in call value.
Hansen cited a similar opportunity to beat the prices of US carriers. “The average smartphone invoice in the US is $92.50,” he said. “That’s the most expensive on the planet.”
Mobile data pricing: Australia vs. the world
The CEO also believes that Amaysim’s pure e-commerce model will make it successful in the US.
“There’s 189 million online shoppers in the States and there’s no single brand there offering a distinct e-commerce based proposition,” he said.
“That’s bizarre because it’s the land of Amazon, Apple [and] Expedia ... All other industries have gone full-blown e-commerce. The wireless industry is a bit of an inefficient, lagging industry.”
Hansen noted that a barrier to entering the US in the past had been the wireless industry’s use of two different wireless technologies — GSM by AT&T and T-Mobile and CDMA by Verizon Wireless and Sprint Nextel. The CDMA technology does not use SIM cards, preventing customers from taking their existing handsets to other networks.
However, with new 4G services all of the telcos have gone with LTE technology that uses SIM cards.
As an MVNO, Amaysim would ride on an existing national US operator’s network. While multiple MVNOs in the US are on Sprint — including Boost Mobile and Virgin Mobile before they became wholly owned subsidiaries of Sprint — Hansen said Amaysim has reached out to all the carriers.
“Sprint has certainly deployed a strategy of saying, ‘Whoever you are, if you bring 5000 customers I’ll sign you on,’” he acknowledged. “We’ve obviously been in touch with all carriers.”
As it has done in Australia, Amaysim would initially take a selective approach to acquiring US customers.
“You’d be foolish to think you can blitz the nation with Super Bowl campaigns and become a national brand overnight,” he said.
“The beauty about a market like the US is you create the market you want to address. You can pick your Australia within the US ... You can absolutely be a national brand without ever advertising in New York.”
Hansen said Amaysim has not set a date for moving into the US. “It’s all in flux. It all depends on maturity [and] set up. We’re entrepreneurs and we’re moving fast if we see an opportunity. We’re still at the stage of sizing it.”
“But we usually don’t muck around if we think [a market is] ready for the picking.”
In addition to the US, Amaysim is also eyeing expansion into mainland China, Hansen said. “There’s ways of introducing this cost efficient model into the Chinese market at a certain stage.”
Hansen assured us that the company’s international ambitions won’t see Amaysim losing focus on Australia. Amaysim plans to its headquarters in Australia, setting up an American office of about 50 people, he said. The CEO added that he has just become a permanent resident and personally intends to stay in Sydney.
“Australia is a beautiful asset that is growing very fast and we’ll definitely not take our hands off it. But we’ve organised ourselves in a way where we can now continue to deliver great customer service and value to Australians, but also hopefully helping other people on the planet getting the same experience.”
Next page: 4G coming to Australia?