Amaysim’s acquisition of Vaya is potentially good news, not just for frustrated Vaya customers, but for all Australians in the market for a better value phone plan.
On Monday, Australia’s biggest tiny telco announced it would buy its smaller, Brisbane-based rival for a total cost of $70 million as part of a “dual-brand strategy” that will see both brands co-exist.
The purchase is the warning shot of a coming “price fight” that will benefit all consumers, according to experts.
Amaysim’s spokesman said the rationale behind the together-but-separate approach was to enable the company’s flagship brand to keep chipping away at the big telcos, while cut-price Vaya protects the rear from emerging “price fighters” like Woolworths, Coles, Aldi and TPG.
“The Amaysim brand will continue as the customer champion that targets the likes of Telstra, Optus and Vodafone customers, while the Vaya brand targets the price fighters,” CEO Julian Ogrin told The New Daily.
“It helps us compete against the big guys by having a bit more muscle. It strengthens us, gives us a bit more firepower, and allows us to do a lot more things that we would love to be able to do, faster.”
When the telcos fight, you win
The fact that Amaysim is preparing for a price war is proof we are headed for a period of consolidation and intense competition, according to a telco expert — which, if true, is good news for you.
“Amaysim is trying to get enough market share now so they can hold on through this period,” RMIT network engineering expert Dr Mark Gregory told The New Daily.
“The big supermarkets can have wafer-thin margins to bring in that sort of reseller-type market. Plus, they’ve got shops everywhere, so it’s going to become very, very competitive. And then you add in TPG, who I believe are going to offer some very outrageously competitive bundles, and we are really going to see some huge changes among that second-tier of resellers.”
Dr Gregory predicted that the “huge shift” to fiercer rivalry would benefit all phone plan customers.
“I think we should, maybe not see prices come down, but I think there’s going to be a data war, so we’re going to see the data caps going up. I can’t see it being too long before one of them offers 10GB a month. I think that’s something we will crack this year.”
A phone plan comparison expert agreed.
“There’ll be a lot of pressure on the other telcos with the money that Amaysim could put into marketing Vaya and that low price point. It might push down the prices of the other telcos as well,” WhistleOut editor Jo Hanlon told The New Daily.
Investors are sure to be smiling too, with the Amaysim (AYS) share price jumping up almost 20 per cent on the news of the acquisition.
Current customers may benefit too
Amaysim’s CEO also pledged to quickly “iron out” the level of customer complaints at Vaya.
In recent years, Amaysim has boasted the lowest rate of complaints to the telco watchdog, the TIA, while its former rival Vaya was plagued by one of the highest. No more, Mr Ogrin said.
“We will be able to give Vaya customers the benefit of some of our service platforms that our Amaysim customers get the benefit of,” he said.
“We will very quickly be able to sort out some of these things and iron out some of the service gaps and provide a very good Amaysim-like service, but at the same time we will make sure we engage with the TIA and make sure we can get that brand on track.”
Current Amaysim customers may also benefit from Vaya’s large overseas web development team, which Mr Ogrin said would be harnessed to improve the online customer service of both brands.
“What Vaya brings is an office in the Philippines, which allows us to build a big a big web development team that can help us fast-track some of our DIY development for both Amaysim and Vaya.”