Graeme Philipson
May 25, 2016

Amaysim race a white knuckle ride

High Growth Focus

Amaysim race a white knuckle ride

Amaysim numbers: Among the fastest growing mobile service providers in Australia

Amaysim was launched in 2010 as an Australian MVNO (mobile virtual network operator). Like all MVNOs, it does not have its own network, but resells capacity from one of the three major carriers – in this case Optus.

Amaysim listed on the ASX in July 2015, after becoming the fastest growing mobile services providers in Australia. With the recent acquisition of Brisbane-based Vaya, it now has more than 900,000 subscribers, making it the fourth largest mobile provider in Australia, after Telstra, Optus, Vodafone and Virgin. It is the second largest MVNO after Virgin, which is a wholly owned subsidiary of Optus.

Amaysim has a prepaid SIM-only business model, and sells only on-line with a self-serve DIY customer service model. The system allows it to operate with just 120 staff.

“Everything is online,” says chief executive Julian Ogrin. “Instead of increasing our headcount, we scale the business by investing in technology. “

“Amazon Web Services hosts all of our technology in the cloud. The platform is so scalable that we could triple our customer base with only a handful of extra employees.”

Amaysim operates out of smart offices near Sydney’s Circular Quay. It may be a cut-price operation, but its CBD location is a great way to ensure staff retention, says Mr Ogrin.

Virtually all the company’s staff are there, mostly in a call centre. Not that they answer so many calls nowadays – two thirds of customer contacts are now online chats. “An operator can handle three of four chats simultaneously,” says Mr Ogrin. “Much more efficient.”

Efficiency – and its close relative simplicity – is what Amaysim is all about. “We have low overheads. We are totally e-commerce driven. We don’t have expensive retail stores and we can handle all calls from our in-house contact centre. We do all billing and development internally.”

Mr Ogrin says that Amaysim’s biggest challenge is educating the Australian market that there is a new disrupter telco. “Despite being five years old and having nearly a million customers, we still need to tell people that there is an alternative to the dinosaur carriers.

“We need to break down outdated ideas such as you need to be tied in to a contract. DSwitching mobile service providers is not hard anymore.”

Mr Ogrin says that Amaysim has already reinvented itself many times. “When we launched we shook up the market by disrupting pricing and existing telco norms.”

“Soon after that we introduced one of the first unlimited mobile plans, which shifted the focus from talk and text to data. We are now increasingly transforming into a customer experience driven business.

Mr Ogrin says growing any business is difficult, regardless of the industry. “But it’s especially difficult in a heavily regulated environment like telecommunications. It would be helpful if the Australian government could offer more support for start-ups and budding entrepreneurs, while reducing sector-specific regulation that may not achieve the desired outcomes.

“Instead of forcing obligations through legislation, we need more self-regulation. In the telco industry we’ve seen significantly greater compliance through the use of industry codes.”

He says a good example of this was the introduction of the Telecommunications Consumer Protection Code in 2012, which saw customer complaints drop year on year to current record lows.

“Amaysim is the leader out of all of the providers the TIO (Telecommunications Industry Ombudsman) and the industry body Communications Alliance analyses. The implementation of a code based approach allows industry to quickly respond and encourages compliance through consultation.

“We take inspiration from other disruptors like Uber and Airbnb. Like Uber, Amaysim has pioneered a leading position by disrupting a stale industry and leveraging existing infrastructure.

“By using the Optus infrastructure and relying on technology to enable us, we’ve been able to scale quickly and significantly without bearing the burden and cost of building and maintaining network infrastructure.”

The formula will continue in the future, says Mr Ogrin. “We will focus on staying agile and disruptive, growing organically and moving into new markets, and by continuing to build a better customer experience for mobile users.”

The January 2016 acquisition of competitor Vaya, Amaysim’s first, added around 140,000 subscribers to the its customer base, and brought with it a development and customer service centre in the Philippines.

“Our dual brand strategy will help us make further inroads in the Aussie telco market. Vaya has enabled us to compete in the sub $30 a month plan market, where Amaysim will continue to take on the major carriers, allowing both brands to focus on what they do best.”

The most important new market Amaysim will target is small business, says Mr Ogrin. It is also looking for a stronger presence in regional Australia. “The Optus 4G network now reaches 92 per cent of the Australian population, meaning huge growth opportunities for Amaysim.”

But Mr Ogrin sees many challenges. “The most important is staying innovative in a competitive market. We need to staying true to our values and maintaining our culture. We started with four words scrawled on a piece of butchers’ paper: agility, reliability, simplicity, empathy."

"They have become our four core values and are etched into our ethos, allowing us to value-check everything we do."

“It’s tricky staying entrepreneurial as an ASX listed company. We’re not a scrappy start-up anymore. As we mature the business, we’re focussed on ensuring our culture does not change in the process and that we hold on to entrepreneurial roots.

“We need to make sure we stay true to our customers. We work hard every day to keep them happy. Word-of-mouth is our biggest acquisition channel – it indicates that we’re doing is really hitting home.”

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