Consumer telco, amaysim, has launched a new mobile phone plan aimed at mid-tier users, completing its product range to target customers at every level of spend.
The $19.90 Flexi plan gives users 220 call minutes or text credit to national numbers as well as a 500MB data limit. It sits in between amaysim’s pay-as-you-go plan for light mobile users and the telco’s $39.90 unlimited plan for heavy users.
amaysim launched the Flexi plan in response to customer demand and market research which identified a sweet spot in between its light and heavy user mobile plans.
“It’s a large segment we are tapping into with the Flexi plan and now we have three simple products for three distinct segments,” amaysim founder and CEO, Rolf Hansen, told ARN.
He expects the Flexi plan will appeal mainly to older teenagers and cost-conscious younger families with tight budgets.
The telco offers its services over the Optus mobile network.
amaysim's objective is to differentiate itself from the big telcos by offering price competitive plans and great customer service. As such the company does not charge flagfall when customers make calls, slashed call rates to as low as $0.09 per minute, and does not lock users into standard 24-mont contracts.
Since its launch 19 months ago, the telco has nabbed hundreds of thousands of customers and is looking to become a profitable business by the next fiscal year.
Despite yielding good results so far, there are still barriers preventing amaysim from further exponential growth. These include a large number of mobile users still in lengthy locked-in contracts with other carriers and customer confusion when comparing telco mobile plans.
The latter hurdle is expected to diminish as the Australian Communications and Media Authority (ACMA) moves to overhaul mobile advertising standards by asking the Communications Alliance to revise the Telecommunications Consumer Protection (TCP) code, according to Hansen.
Changes in the TCP code so far have yet to be approved by the ACMA.
“Sometimes customers find it hard to compare prices between telcos because of these inflated Capped plan dollars,” Hansen said.
Cap plans generally offer a high call value at a lower rate. It is common for $49 Cap plans to have over $300 worth of call credit but many of them have high call rates.
“We believe this will ease over time because regulation is now pushing for unit pricing,” Hansen said. ‘I think once the big telcos have to write down a two minute call can cost as much as $2, people will start looking for a change.
“It’s getting more into people’s awareness that there are alternatives out there whereas in the past they can’t be bothered changing because they think every telco is the same.”
Foray into the business market?
amaysim has staunchly stayed in the consumer mobile space. When asked whether the company would look into expanding into the business segment, Hansen said it has no interest in doing so.
“It’s a completely different model and business customers rightfully want a full service which usually involves hardware, dedicated customer service, and so on,” he said. “What we are trying to do is do what we are good, which is in the consumer side of things.”
Many analysts have said telcos need to expand its product offering into the business sector since margins in the consumer space are shrinking and that competing solely on price is not the best approach in the future. But Hansen shrugged off these concerns, claiming they only apply to large telco network operators with huge overheads and network infrastructures to support.
“We’re very lean – we have 110 employees and 60 of them are in the customer service centre,” he said. “Yes, we compete on price differentiation, but that’s just one component and we treat our customers well so they will not only stay with us but recommend us to others.”
Hansen also claimed amaysim’s customer acquisition cost is below $50 while for other telcos it’s between $250-$350.
“We don’t give away subsidised handsets and people start talking about us positively,” he said. “We are a new way of doing business and we are very well-suited to sustain any competitive pressure because we can work on the thinnest margins.”
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