The MVNO Chief Executive discusses M&A, Google and future growth.
Eurocomms.com: Given you use O2’s network, what are your thoughts on the news that Hutchison Whampoa has agreed to buy the operator?
Chris Tooley: We’ve had a fantastic relationship with 02 over five years, not only in the UK but also through parent company Telefónica in Spain.
They’ve helped us get introduced into additional overseas markets… and we hope that this relationship can continue for many years to come under the new owners.
The good news there is that we have a relationship with the parent company Hutchinson Whampoa and we believe that… will be good news for Lycamobile in the short, medium and long term.
Although as a full MVNO we can move to other operators, it’s not in our plan to do so - it’s simply an option the technology gives us.
But the fact that we’ve never moved from O2 in five years is a testament to the good relationship that we have and I’ve every expectation that we can continue that.
What are your thoughts on the impact of this and the BT/EEE merger will have on the wider MVNO scene?
If there’s one thing that we’ve learned in technology is that it never stands still. It’s not surprising that BT wants to get back into the mobile business. People were really surprised when BT Cellnet was sold… big operators like BT need to have triple and quad-play products.
[The MVNO business] has had a huge growth in the UK in the last 10 years [but] you can’t sustain that level of growth indefinitely, so I think we’ll probably see a slowdown.
We may see some consolidation within MVNOs, or some MVNOs may cease to operate. It’s a pattern we’re seeing in other countries.
Amid rumours that Google is planning to launch its own MVNO, how concerned are you about competition from new rivals?
Google is one of the world’s largest companies, so I will follow their progress with great interest!
I’m always concerned about competition, of course! We’ve got to fight to win and keep every customer, and other MVNOs doubtless want to do the same thing.
They’ll see Lycamobile as a very large operator, but obviously smaller operators can be more nimble – the can maybe look at something we do and try to do it a little bit better, or focus on a niche within our market.
People will always be trying to chip away at us. At the same time, we’re always trying to attract customers from other operators – that’s the nature of the beast.
Overall though, we believe the market is not finite, that the market will continue to grow.
The history of the MVNO business is that it hasn’t simply cut the cake a different way, it’s made the cake bigger, and I think although the growth is not as fast as it once was, there’s still scope for growth, and that growth can mean new customers for both the MVNOs and for the operators themselves.
You’ve set targets to grow your user base by 25 percent over the next 12 months, and you’ve expanded into Romania as part of this objective - where else are you headed?
We’ll launch Hong Kong this year as well and I expect at least two other, which will be announced in due course.
We’ve set ourselves aggressive targets and we plan to grow those in all existing countries – 18 countries where we currently operate – plus new countries in which we’re launching during the course of the year.
How do you think the role of the MVNO is changing and where do you think it’s headed?
I think the category MVNO subdivides into a number of different categories and Lycamobile is obviously at the bigger end of the MVNO category.
We’re one of the world’s largest, and I think some of the larger MVNOs would like to be perceived as being like an operator in their own right.
We’d like to think that our customers don’t necessarily see us as an MNO or MVNO, they just see us as a service provider and they don’t distinguish between the two.