Optus invests in sub-brand strategy to target value customers

Australia network

Optus is looking to make itself more attractive to customers at the budget end of the market via both a significant MVNO acquisition and a new sub-brand launch.

Australia’s second largest mobile operator has agreed to acquire virtual player Amaysim, which already offers services using its network, for A$250 million. The deal is subject to shareholder approval and various other completion conditions.

Amaysim claims to be Australia’s largest MVNO and its fourth largest mobile provider, with a customer base of 1.18 million as of mid-2020. Given that regulator the Australian Communications and Media Authority (ACMA) shared that MVNOs made up around 4.3% of the market with a collective 1.55 million customers last year, those claims are likely to be correct.

Optus reported an overall increase of 1.6% in mobile customers in the financial year to the end of March to 10.45 million, driven by solid postpaid growth, but its prepaid business is on the slide, losing 42,000 customers over the same period. Its market share stands at about 29%, based on the ACMA’s 2019 figures.

It is clearly keen to address that issue, hence its plan to bring the Amaysim brand under the Optus umbrella, and its decision to launch another new sub-brand: Gomo.

It describes Gomo as “a new digital brand designed for those seeking simple plans and budget friendly telecommunication services,” but has yet to unveil details of those tariff plans. Gomo will be digital-only, which is a slicker way of saying that customers will manage their service themselves, online, via an app. It’s a model that is working in other global markets, and builds on parent company Singtel’s Gomo offering in a number of its other markets: the Philippines, Indonesia, and Thailand.

Optus has pledged to share more information on the Gomo service soon.

The sub-brand strategy has been key for mobile operators in Europe for a number of years, particularly with a view to capturing the low-spend end of the market without compromising the group brand, but it’s a new departure for Optus.

The addition of Amaysim and Gomo will enable the telco to “cater to the needs of specific groups of customers,” said Optus CEO Kelly Bayer Rosmarin, referring of course to budget users.

“Optus has been rated Australia’s strongest brand, and is competing well in the market, but we have not had any sub brands competing in the growing MVNO segment of the market,” Rosmarin said. “That’s why we are so excited to extend our reach and appeal by adding Australia’s largest and most successful MVNO brand, amaysim, and a new digital brand, Gomo, to our line-up.”

Further, Optus insists it intends to “disrupt” the MVNO market in Australia.

There are many virtual players in the country, but together they have no made a huge impact on the market. However, with network operators like Optus getting in on the action and a global recession looming, the market for budget mobile plans could be big down under in the coming years.

One comment

  1. Avatar KEIR PREEDY 03/11/2020 @ 1:14 am

    Optus used to dominate in this part of the market through their wholesale offerings and the Virgin Mobile MVNO, then they disposed of them. Coming round full circle?

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