Telco mobile virtual network operator (MVNO) Amaysim plans to acquire approximately 77,000 mobile subscribers from fellow Optus MVNO My Mobile Data, which trades as Ovo Mobile, in a deal valued up to $15.8 million.
Peter O’Connell, CEO and managing director of Amaysim, said the acquisition was a part of the telco provider's strategy to grow its recurring mobile subscriber base, as over 74,000 of the acquired subscribers are recurring.
This brings Amaysim's total recurring mobile subscribers up to 821,000, rising 13 per cent compared to three months ago and 30 per cent since FY2019, according to an announcement posted to the Australian Securities Exchange (ASX).
In total, the acquisition will bring Amaysim's total subscriber count to 1.17 million.
“Under our asset-light operating structure, we are able to scale the subscriber base with no, or nominal, additional resources, delivering positive future earnings from the acquired base,” O’Connell said.
These newly acquired subscribers are expected to be migrated under the Amaysim brand within four months – as both Ovo and Amaysim utilise the Optus network – and placed on plans that are at least equal to the value of their existing Ovo plans, with most subscribers to receive increased inclusions.
By offloading its mobile customers, Ovo will change its focus to its AI business, according to Matt Jones, Ovo CEO.
“Amaysim has a reputation for delivering excellent customer service and value and we can be confident that the Ovo mobile customers will be well looked after and supported once under the Amaysim umbrella,” Jones said.
The deal is expected to close "imminently" according to the announcement and is anticipated to generate positive earnings in FY2021, with further growth expected for FY2022 and beyond.
The acquisition of Ovo's subscribers follows the $7.8 million acquisition of mobile virtual network operator Jeenee Communications, which saw Amaysim acquire over 417,000 subscribers in December 2019.
The telco provider also announced it was on track to reach its guidance for FY2020, expecting to report earnings before interest, taxes, depreciation and amortisation (EBITDA) within the range of $33 million to $39 million.