Vodafone Basque
With all the noise about the Vodafone UK Broadband Reseller deal, something much more important for the bottom line seems to have passed relatively un-noticed at the VodaEuro growth engine ie España.
Vodafone has signed a MVNO deal with Euskaltel. For those who don’t already know Euskaltel was already a reseller of Amena (now owned by France Telecom) in the Basque region of Spain and has 460k customers. Unfortunately, this leaves Amena in a world of pain: not only does it potentially lose the 460k customers, but it loses distribution in the Basque region and is left looking stupid with a minority position in a company buying services from the competition. The fall-out from this deal will be probably make a few Spanish lawyers a little richer.
The interesting part of the deal to me is that Euskatel probably put its’ traffic and distribution out for bids and Vodafone probably won with the lowest bid. After all the marginal cost of this traffic is probably extremely low for Vodafone, its improves the ARPU metric (Vodafone counts MVNO's as 1 customer regardless of actual customers) and probably will increase penetration in the fiercely nationalistic Basque region.
This process of moving traffic is something I expected to occur quite regularly in the MVNO space. However, I’m aware of only one other deal where a MVNO put its’ minutes out to tender: BT in the UK, which was also won by Vodafone from O2. In the UK it is obvious that because of the historical minority ownership by the networks (O2 & T-Mobile) renowned penny-pinchers such as Tesco and Virgin Mobile have not put their traffic out for tender. Carphone Warehouse has 100% ownership of its’ Fresh MVNO, which is a frequent money-loser - I wonder why Charles Dunstone has never tried to swap networks.
Speaking of Virgin Mobile, they seem to have lost another of original team with the exit of Graeme Hutchison. My money is on Virgin Mobile turning into a complete disaster in the medium term for ntl.
Vodafone has signed a MVNO deal with Euskaltel. For those who don’t already know Euskaltel was already a reseller of Amena (now owned by France Telecom) in the Basque region of Spain and has 460k customers. Unfortunately, this leaves Amena in a world of pain: not only does it potentially lose the 460k customers, but it loses distribution in the Basque region and is left looking stupid with a minority position in a company buying services from the competition. The fall-out from this deal will be probably make a few Spanish lawyers a little richer.
The interesting part of the deal to me is that Euskatel probably put its’ traffic and distribution out for bids and Vodafone probably won with the lowest bid. After all the marginal cost of this traffic is probably extremely low for Vodafone, its improves the ARPU metric (Vodafone counts MVNO's as 1 customer regardless of actual customers) and probably will increase penetration in the fiercely nationalistic Basque region.
This process of moving traffic is something I expected to occur quite regularly in the MVNO space. However, I’m aware of only one other deal where a MVNO put its’ minutes out to tender: BT in the UK, which was also won by Vodafone from O2. In the UK it is obvious that because of the historical minority ownership by the networks (O2 & T-Mobile) renowned penny-pinchers such as Tesco and Virgin Mobile have not put their traffic out for tender. Carphone Warehouse has 100% ownership of its’ Fresh MVNO, which is a frequent money-loser - I wonder why Charles Dunstone has never tried to swap networks.
Speaking of Virgin Mobile, they seem to have lost another of original team with the exit of Graeme Hutchison. My money is on Virgin Mobile turning into a complete disaster in the medium term for ntl.
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