DIN-CUBE-RED-w2 Profiled in Dynamic Intelligence Network (DIN)

Telcos are hanging up on the world of virtual mobile networks

australia_flag_map-ftsource TechRadar

As a general rule, volcanoes don’t just erupt. There’s a build up of gases, of red-hot magma and a series of warning signs that indicate to anyone paying attention that they should get the hell away if they want to avoid burning to death.

It’s the same with the sub industry of low-cost virtual mobile networks at the moment. While the industry seems like a great way of saving a bit of cash compared to the major telcos in the country, the demise of wholesalerISPOne and its customer Kogan Mobile are but the latest signs that not all is well in the land of licensed mobile networks.

Of course, the warning signs started long before ISPOne’s collapse. It wasn’t even two months ago that Red Bull Mobile ended its run as an MVNO using the Vodafone network, which came just a month after Vaya acquired rival Live Connected.

Prior to that Crazy Johns rose to glory and then collapsed just as spectacularly, being bought out then shut down by Vodafone.

This week’s collapse of Ruslan Kogan’s attempt to supplement his growing online retail presence with the Kogan mobile network is but the latest in a long succession of warning signs that something is not right in the industry.

Slimmer margins, slimmer hopes

But what is the problem? Why are there pools of MVNO magma collecting at the base of Mount 3G, possibly preparing to explode in a spectacular display of fire and prepaid SIM cards?

There’s no simple answer, really. Ruslan Kogan, suddenly reeling from the loss of his own virtual mobile network, claims conspiracy from the major networks unhappy with upstarts using their infrastructure to sell unlimited plans.

Could these claims be true? It’s a possibility. When you consider just how much Kogan was undercutting Telstra’s price - especially on bundled data – it’s impossible to imagine that the national phone company would be happy to share so much bandwidth with someone selling it so cheap.

Especially given Telstra would be receiving a fraction of the income it would get if those 100,000 Kogan customers where paying Telstra directly.

But there are other possible explanations as well. It could have been top-level financial mismanagement, or tougher competition in an already difficult market, or the increase in demand for data compared combined with the increased cost of data as well.

But despite our speculation, one thing is for sure – to resell another telco’s network, in order to make a profit you need to live off slimmer margins. And slimmer margins makes survival and success a harder battle.

Eruption and survival

There’s a reason that the main three telcos – which account for about 95% of all mobile connections anyway – have all dropped the amount of bundled data in their plans over the past 12 months.

Data is a much bigger drain on a network’s bandwidth than voice, especially when today’s smartphones all keep updating with Facebook and Twitter and emails while the screen is off and the phone is in your pocket.

Maintaining network performance in a country where smartphones now account for the majority of handsets sold has become critically important, asVodafone discovered a few years ago.

But while things are looking fairly grim for MVNOs in general at the moment, it’s unlikely we’ll see the industry collapse completely under the weight of a Vesuvius-like eruption.

Some networks, like Virgin Mobile or Boost Mobile, are so well integrated with their carrier network that they are likely to survive no matter what.

The tougher challenge will be faced by the smaller MVNOs. In the coming months, it’s fair to expect the more generous prepaid options to adapt, either reducing the bundled data or talk and text value at the same price, or increasing the monthly recharge cost.

And when that’s done, the MVNOs will offer plans much more in line with the major telcos. They’ll still be a little bit cheaper – squeezing profits from even tighter margins – but the days of unlimited calls and large data quotas are ending.

They’re not dead yet though, and that means there’s still good deals to be had for anyone brave enough to camp at the foot of the volcano…

source link via Telcos are hanging up on the world of virtual mobile networks


australia_flag_map-ftAdditional Resources
To View Category = Australia, please use the following Resource, or alternatively view the Australia‘s RSS News Feed, or our Main Site Feed.

To See current Australian MVNO Companies, please use the following Link.


Technorati Tags: Mobile, Blogging, Blogs, Phones, Technology

Share
Image Credit(s): (c) All trademarks mentioned in this release are the property of their respective owners

Please take our Survey to help improve the site.5f7232aa8d37115b23583a025e20ef22
BROKEN Link, inaccurate Information, please contact us, and we will check it, and Fix It!
For those of you looking wanting to be included in our site; please use the following Contact Form. If you are an International Roaming MVNO Provider, and want to be included in our upcoming listings, and expose, then please complete the following form.


Copyright policy: All content on this site are the copyright of MVNO Dynamics, unless cited or stated. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of information on the Internet. So our reproduction policy is as follows: You may quote up to 400 words of any of our posts, and articles on the condition that you attribute the credit to MVNO Dynamics and either link to the original article or to www.mvnodynamics.com. All other use is prohibited. MVNO Dynamics will not be liable for any errors or omissions in this information. This site does not mean to harm, or encourage to harm any companies or person(s). Please Refer to our Legal Disclaimer for further information.