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Kogan down, but cheaper rates attracting more customers to Mobile Virtual Network Operators

Source: Roy Morgan Single Source (Australia), August 2012 to July 2013, Australian Main Mobile Phone Users 14+ n=8,633.

An increasing number of Australian mobile phone users are connected via virtual networks. In the wake of Kogan Mobile’s collapse, will customers scurry back to the main telcos or pick another virtual network operator?    

Via wholesale network and retail reseller agreements, Mobile Virtual Network Operators (MVNOs) provide service to customers on a network operated by Telstra or Optus. The last MVNO using Vodafone, Red Bull Mobile announced in July it will close shop on September 1.

Now Kogan Mobile customers are again in the market for a cheap service provider with the MVNO losing its network reselling rights after sub-wholesaler ispONE went into voluntary administration on August 19 and cancelled its wholesale agreement with network owner Telstra.

In the three years to June 2013, the proportion of Australian mobile phone users aged 14+ using an MVNO increased from 9.2% to 14.3%, with the bulk of growth coming from post-paid consumers, from 5.3% in 2010 to 9.4% now.  

The most common reason for MVNO consumers to choose their current Mobile Service Provider (MSP) was cheaper rates at 60.2%, compared with just 21.8% overall of customers with one of the large MSPs—Telstra, Optus or Vodafone.

Those using an MVNO were also more likely to be satisfied with their current provider (78.5% satisfaction versus 67.0% satisfaction among customers of the large MSPs). MVNO consumers are also more likely to agree with a range of positive customer service attributes.

Consumers’ satisfaction with and attitudes to their current Mobile Service Provider

Source: Roy Morgan Single Source (Australia), August 2012 to July 2013, Australian Main Mobile Phone Users 14+ n=8,633.

George Pesutto, Media and Communications General Manager, Roy Morgan Research, says:

With the recent collapse of MVNO Kogan Mobile, stranded customers will be faced with the choice of signing up with another MVNO or moving to a traditional MSP. For those re-signing with an MVNO, cheaper rates will be the primary reason. Also influencing the decision to re-sign with an MVNO will be the perception of better customer service versus the large MSPs.

“Overall, it is not surprising that MVNOs continue to grow. Cheaper rates attract many customers—and they are staying thanks to stronger service provider satisfaction and better customer service.”

Click here to view our extensive range of mobile phone service provider customer profiles.   


For comments or more information please contact:

George Pesutto, Media and Communications General Manager

Telephone: +61 (3) 9629 6888

george.pesutto@roymorgan.com

 

About Roy Morgan Research

Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in New Zealand, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has over 70 years’ experience in collecting objective, independent information on consumers.

In Australia, Roy Morgan Research is considered to be the authoritative source of information on financial behaviour, readership, voting intentions and consumer confidence. Roy Morgan Research is a specialist in recontact customised surveys which provide invaluable and effective qualitative and quantitative information regarding customers and target markets.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2