Pivotel is targeting the low-end mobile phones market as part of plans to boost its cellular network play.
The company traditionally deals in satellite voice and data services but has ramped up its cellular network involvement since 2009 through its Think Mobile and Reward Mobile brands which resell Telstra GSM and Vodafone services.
With the recent acquisition of Just Mobile which works with prepaid mobiles, Pivotel is aiming for the lower-end of the mobile services market.
“The marketplace in the lower-end customer base which spend around $20-30 have traditionally not received great value or customer service from the big carriers,” Pivotel managing director, Peter Bolger.
Certainly many telcos place a higher value on customers that consistently spend more on their networks. While Pivotel may not operate at the same scale as the bigger telcos, its strength is in customer service, according to Bolger.
With its small operation comes lower cost around customer management which and saving from that is invested into better customer service, he said.
Having increased its customer base to 80,000 partly attributed to acquisitions and word-of-mouth marketing, Pivotel is in a better position to price haggle with the wholesale telcos so it can provide better value to its target market, Bolger said.
Pivotel aims to drive customer numbers up to the few hundred thousand mark within the next five years.
“In the next 12 months we will continue to pursue a fairly focused strategy of going for lower spend customers through Think Mobile and Reward Mobile,” Bolger said.
Think Mobile will focus on the bottom-end while Reward Mobile will target the low-spend android phones market. Prepaid is also another space Pivotel will be involved with heavily through Just Mobile.
There are no immediate plans to play in the top end of the market at all.
“The big guys compete very aggressively there through price and it’s not an area we think we can compete in,” Bolger said.
Pivotel is looking at expanding its interconnect presence to support growth. It currently connects services through one single switching point in Sydney but wants to improve interconnect capabilities to push further into other states.
“This allows us to get some further differentiation and some economies of scale as we push traffic through and lower our cost base a little further,” Bolger said. “We’re not building mobile base stations, just building further points of interconnect (PoIs) where we connect to other networks.
“There are particular opportunities we see in the NBN but we are not rushing into things until we see the more of the network’s infrastructure out there.”
Flow-on effects from the Vodafone scandal
Since Telstra does not resell its NextG network, Pivotel relies on Vodafone for the supply of high-speed mobile data services.
Vodafone’s efforts in attracting data customers fit well with Pivotel’s strategy in that space.
“We’re really try to go for customers looking for second sim cards for notebooks for smartphones where data is increasing becoming more important,” Bolger said.
Despite the bad press which continues to plague Vodafone’s cellular network and services, Pivotel isn’t looking to defect from the telco any time soon.
“It’s not a worry for us even though there was a small impact on us from that,” Bolger said.
During the height of the Vodafone network scandal, Pivotel did experience lower new customer sign ups and increased numbers of customers leaving the its network.
But Bolger maintains the numbers weren’t significant.
“We’re no longer seeing that anymore,” he said. “Connections are back to the way they were before and we continue to maintain a churn rate that is below industry average.”