An increasing number of Australian mobile phone users are connected via virtual networks. In the wake of Kogan Mobile’s collapse, will customers scurry back to the main telcos or pick another virtual network operator?
Via wholesale network and retail reseller agreements, Mobile Virtual Network Operators (MVNOs) provide service to customers on a network operated by Telstra or Optus. The last MVNO using Vodafone, Red Bull Mobile announced in July it will close shop on September 1.
Now Kogan Mobile customers are again in the market for a cheap service provider with the MVNO losing its network reselling rights after sub-wholesaler ispONE went into voluntary administration on August 19 and cancelled its wholesale agreement with network owner Telstra.
In the three years to June 2013, the proportion of Australian mobile phone users aged 14+ using an MVNO increased from 9.2% to 14.3%, with the bulk of growth coming from post-paid consumers, from 5.3% in 2010 to 9.4% now.
The most common reason for MVNO consumers to choose their current Mobile Service Provider (MSP) was cheaper rates at 60.2%, compared with just 21.8% overall of customers with one of the large MSPs—Telstra, Optus or Vodafone.
Those using an MVNO were also more likely to be satisfied with their current provider (78.5% satisfaction versus 67.0% satisfaction among customers of the large MSPs). MVNO consumers are also more likely to agree with a range of positive customer service attributes.
George Pesutto, Media and Communications General Manager, Roy Morgan Research, says:
“With the recent collapse of MVNO Kogan Mobile, stranded customers will be faced with the choice of signing up with another MVNO or moving to a traditional MSP. For those re-signing with an MVNO, cheaper rates will be the primary reason. Also influencing the decision to re-sign with an MVNO will be the perception of better customer service versus the large MSPs.
“Overall, it is not surprising that MVNOs continue to grow. Cheaper rates attract many customers—and they are staying thanks to stronger service provider satisfaction and better customer service.”
Source: Roy Morgan Single Source (Australia), August 2012 to July 2013, Australian Main Mobile Phone Users 14+ n=8,633.
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