Nu Mobile Operator, Telstra Network & 2nd Hand Smartphone Deal
A new ‘cheap ‘smartphone operator that is set to flog second hand mobiles that work on the Telstra network is set to be launched in Australia.
The biggest MVNO player is Amaysim, with about a third of the market, followed by Medion, TPG and Vocus these players already have 16% of the Australian mobile market.
The benefit that Nu Mobile has is that it has access to more than one million second hand smartphones which the Company already leases to mobile retailers, which lease them on to customers.
The terms of these leases require customers to return the phones after one or two years, meaning Macquarie already owns a large number of used smartphones according to the Financial Review.
The concept is popular in the United States but is yet to take off in Australia.
Unlike its competitors, which in the past has favoured the SIM-only model, Nu Mobile will only sell mobile plans bundled with used smartphones.
The Nu Mobile business will sit within Macquarie’s Corporate and Asset Finance business with none of the handsets identified as being supplied or owned by the financial services Company.
The Australian Financial Review understands Macquarie has “soft launched” Nu Mobile products by making them available to staff and will launch on the wider market in the next few months.
The MVNO market has grown steadily over the past decade but still accounts for just 16 per cent of the mobile market, according to research house IBISWorld.
There are no retail restrictions on mobile infrastructure owners or mobile network operators and the big three – Telstra, Optus and Vodafone – still dominate retail. Telstra alone has 42.9 per cent of the mobile market.
The mobile industry brings in annual revenue of $24 billion and profits of $2.7 billion, IBISWorld reports. The MVNO market gets a tiny slice of that: revenue of $749.8 million and profit of $84 million. Still, figures from Statista show the MVNOs have doubled their market share by eating into the big three’s customer base.
Macquarie Group is unrelated to Macquarie Telecom. Macquarie Group’s move comes at a time when consumers appear increasingly happy to hang on to existing handsets rather than upgrade every time Samsung or Apple launch the latest model, suggesting there may be an increasing demand for second-hand phones.
Motley Fool told customers that ‘Whilst any increase in competition in the mobile market would be a negative for Telstra, I think it is the likes of Amaysim Australia Ltd and Kogan.com Ltd that are likely to be impacted most by this development’.
Though, until the full details have been released by Macquarie it is difficult to gauge just how much of an impact Nu Mobile will have on the mobile market.
In light of this, I would suggest that investors keep their eyes peeled for the potential launch of the Nu Mobile service in the middle of the year.