Amaysim buys Vaya
Shares in Amaysim have jumped by nearly 20 per cent after the mobile services provider acquired Brisbane-based prepaid player Vaya to boost scale.
http://www.theaustralian.com.au/business/technology/mobile-p…
Amaysim Buys Vaya, reducing competition?
stralya on 04/01/2016 - 22:51
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They're acquiring it. From what I've read, Amaysim is interested in the ~$20 per month market, which Vaya has a strong base of. It sounds like they'll maintain the Vaya brand and keep its selling channels to online-only as it currently is (whereas Amaysim has some presence in retail stores).
I imagine that acquiring a larger customer base may also enable greater negotiating powers for wholesale rates from Optus; but that's just baseless imagination.
Regarding Vodafone, your understanding is pretty far off; The 'vodafone' brand today is a operated under a joint venture owned 50-50 between Vodafone Group (the UK parent company) and Hutchison Telecom (the owner of "Three"). https://en.wikipedia.org/wiki/Vodafone_Hutchison_Australia has a more complete summary.
Thanks for clearing that up!
If Vaya can be considered "competition" with the stories around it, then bring on more such acquisitions.
Am I reading this right?
Vaya owed Optarse $ 50,000,000
140,000 Customers.
50,000,000/140,000
= $357.14 Debt to Singtel per Customer
So for that privledge they are giving big bad (security deposit) Ben $5,000,000 + $15,000,000 worth of paper.
I am very glad this has happened as my $20 security deposit will live a little longer.
Thank christ I ported to Telstra months ago.
If that's not trading insolvent I don't know what is.
I don't think this acquisition is intended to reduce competition. With $50 million in debt, the said competitor is likely to reduce itself sooner or later.
Im not an investment banker but i would think they probably bought the debt at 50c/$ and acquired the company at $20M ($5M cash/$15M Amaysim shares)
Huh … businesses taking on credit with the expectation of future profits is routine, why ya think this will mean going out of business?
Business taking on loan or investment with the expectation of future profits — yes. However the debt here is from the supplier, at a high customer / debt level. As chill has calculated it's at $357/customer to Singtel — or 16 months of ex-GST payment of their middle-of-the-range $24/month mobile plan. Vaya is clearly targeting the price-conscious market (i.e. the same market as most OzBargainers), and they haven't had a positively voted deals here for a whole year, and I am sure their growth have slowed due to bad reviews on Whirlpool and here.
In my opinion, with high debt level + clouded growth prospect — lucky that the owners can walk away with $5m cash + $15m AYS shares.
I agree, and amazed that amaysim would pay $70m EV for this.
Effectively they've paid $500 per customer.
It would be like amaysim giving every new customer signup a free mid to high-end Android smartphone for simply signing up, no contracts.
Meanwhile, Vaya's ARPU is $22/month, and if amaysim's gross margins are anything to go by (revenue - network costs, currently 28-29% of revenue) then one would expect Vaya's gross margins to be around $6.60/month.
If you're generating a mere $80/year in gross margin (i.e. before rent, staff, marketing etc) how do you expect to get ROI on a $500 purchase?
Reading between the lines the security fee debacle now seems more than ever a cashflow grab, especially considering it was in contravention of the TCP: http://www.zdnet.com/article/acma-finds-telcos-contravened-t…
Anyway, glad that I'm not an amaysim shareholder, and enjoy the crazy deals they keep pumping out in their grab for market share. :)
@goosmurf: $500 is indeed quite hefty when considering it as customer acquisition cost.
Cashrewards is currently paying out $45 for signing up Amaysim 8GB Unlimited plan. Even if you triple it ($135) to cover Cashrewards' own margin, affiliate network's margin, cost for the internal marketing team, etc — still well below the $500 to acquire a customer that might spend $50/month. But
- Majority of Vaya customers don't spend $50/month
- Customer acquisition cost through affiliate network is even lower for cheaper plans
I reckon its a bad deal for amaysim. I'm sure most of the vaya customers would have readily switched if a even $50 sweetener was offered to them. If vaya had collapsed, the same customers would have shopped around and a good portion - say 20% as a guess - would have landed on amaysim for no cost. That makes the effective cost per customer in this deal even higher, and some customers may still jump ship elsewhere after all is done and settled. Especially once amaysim finds out some customers are still on loss making plans…
get your popcorn out… :-)
Yay, we get to hear from more self entitled whingers who are getting booted from their $15/month 1.5Gb Unlimited Calls plans!
"I've been a loyal customer"
"I'm moving to someone else, can anyone find me a better deal than $18/month that Vaya are now wanting to charge me?"
"Vaya/LC are greedy"Vaya/LC have done plenty of dodgy shit, but booting people from uncontracted and unprofitable plans after 2 years was fair and reasonable!
Yay I got to read this pointless post that suggests telcos are reasonable entities that aren't continuously attempting to rip people off whilst making large profits.
So despite Vaya being in the hole for $50m, you still reckon they're making large profits?
This is why you should stay away from shonky resellers that could potentially vanish overnight. They are cheap for a reason.
Why would anybody care when they're pre-paying on a monthly basis?
Absolutely, as OzBargainers these MVNOs are awesome as long as you don't sign any long term contracts.
Additionally, with MVNOs the network provider (i.e. Telstra, Optus, Vodafnoe) really doesn't want to lose you as a customer either. They generally won't cut off service until they figure out whether you're a profit or loss making service, which should give you enough time to port out when the MVNO goes under.
Just look at the effort Optus is going to retain churning TPG customers (who are being migrated to Vodafone), and the general price cutting wars. The carriers are desperate for every single customer right now.
I have others things to think about then whether my dodgy MVNO is still running.
Given that in the past 3 years prices for data have approximately doubled were you under the impression that "competition" was working? (protip: paying two times as much for data as you did 2 years ago means it wasn't)
I don't know much about these sort of things but are they doing this to kill the competition or acquire it?
When 3 sold to Vodafone (again I don't know much about this) didn't vodafone try to remove all the 3 plans and put everyone onto vodafone plans?
So is it a good time to get onto vaya because it will become cheap with good customer service? Or time to jump ship before you are put onto a more expensive plan?