Lycamobile CEO hints at upcoming OTT communications app

Lycamobile, the international low-cost calling MVNO, has said it will soon be releasing a communications app for its growing international customer base. Speaking to telecoms.com, CEO Chris Tooley hinted the app will be in the same vein as global OTT communications services like Whatsapp and Viber.

In the world of MVNOs, the balancing act of providing a compelling value proposition to consumers against the risk of biting the hand that feeds is a perennial strategic consideration. Lycamobile is one of the world’s largest MVNO brands, and bases its primary selling point in providing low-cost international calling for its customers. At the moment, the company serves around 14 million customers in 18 countries across Europe and the USA, according to CEO Chris Tooley.

Speaking exclusively to Telecoms.com at a recent charity event, Tooley discussed some of the challenges his company faces in 2015 as it targets territorial expansion, 4G LTE services, competitive differentiation, and the launch of the MVNO’s OTT-inspired international communications app.

“The primary focus, as ever, is cementing the business we’ve already got,” he said. “There’s still a lot of work to be done there in terms of building more international clientele, fighting competition and looking for new markets and products. We’re looking into national markets, potentially, either under the Lycamobile brand or the GT Mobile brand, and also looking to sure up the data proposition.”

As mobile services evolve towards data-centric bundles incorporating LTE, MVNOs are under pressure to quickly assure consumers they aren’t necessarily a lesser brand, Tooley said.

“Customers in developed markets are now expecting 4G, and we have it in two markets, Switzerland and UK. We’ve also got deals signed to put it into France and Holland in the next few months,” he said. “We’re expected to roll that out as and when it becomes available in all our markets. Our concept is to give customers a comparable service to MNOs; so if they’ve got services we don’t have, we’re like a bear with a sore head: we want it. That’s the tricky position MVNOs find themselves in, that they’re not seen as being top notch.

“You’ve got to have a core proposition for customers, which we have with international calling. In terms of differentiating against other MVNOs, the devil is in the detail where you’ve got to look at product features, some small differences in tariffing and bundling. Telecoms consumers are very forensic for what might not be perceived as a significant change, but which seems significant for them.”

And while data-services are undeniably and exponentially on the rise in developed markets, Tooley sees the merit in actively moving into emerging markets, particularly in North African territories.

“We’ve got a clear vision of how many markets we want to move into, and that currently stands at 20 to 25,” he said. “That could go up or down depending on regulation, business analysis and so on. Our vision is to establish a Lycamobile MVNO in destination countries where our customers call to, thereby creating a global product where customers can call each other without leaving the Lyca network. It presents a brilliant opportunity both for us and the operator at either end. We tend to work with the MNOs that has the least market share, who need to do everything they can to make sure they’re not losing customers to local competition.

“You can’t undercut the local operators; otherwise they won’t let you in. We are putting a very interesting international product together, as that’s what we’re known for. One of our main products focusses on Lyca to Lyca calls made internationally, like France to Algeria, which is a big destination with about two or three million people in Algeria who would have a reason to call France. They don’t tend to at the moment because call charges are usually very high in these countries, and they’re hard to access through consumer plans. Also, they’re not in the habit of using them, and they’re using OTT services where they can.”

Tooley’s suggestion of an OTT alternative communication service is something he revealed Lyca will be tapping into. While the MVNO market is apparently not experiencing the decline in traditional voice and messaging revenues seen across the rest of the telecoms industry, he’s keen to insure Lyca against potential decline in demand of its primary service.

“It’s been discussed that OTT communications services will bring the end of mobile telephony,” he said. “I’m not saying that won’t happen, but there’s no sign of that happening in our section of the business. For MNOs, their voice and SMS traffic is falling off, and there’s pretty much a uniform downward curve in this for operators globally, while data is going through the roof.

“Our minutes-per-customer stats are holding up, and that’s the same for SMS, while our data usage is growing. I can only comment on the data in front of us, and that’s saying that if OTT is having an effect on MNOs, we haven’t seen that affect us yet, though I’m not saying it won’t.”

Tooley was coy on giving over too much information about Lyca’s app launch, but insists it will be another string to the operator’s bow in facilitating international communications.

“The market is moving and evolving all the time, and it’s a little bit unpredictable. My personal belief is that there’s room in the market for all these products for the foreseeable future,” he said. “That said, we’re hedging our bets by bringing an app out pretty soon. We’re just putting the finishing touches to it right now, and that will sit out there as another OTT service.”

It appears that voice over LTE (VoLTE) services are far on the horizon for the MVNO still, however. “Considering we’ve just launched LTE full stop, it would be premature of me to make any sweeping statements about VoLTE,” Tooley said.