Monday, 30 March 2009

Lebara partners with Vodafone for prepaid SIM card launch – Australia

Lebara Mobile, a low-cost ethnic market MVNO, has entered into an agreement with Vodafone Australia to launch a new prepaid mobile SIM card service (for both local and international calls) in Australia. Under the terms of the agreement, Vodafone Australia will provide the network infrastructure to Lebara Mobile, which will enable Lebara Mobile customers to make calls to numbers within Australia. e-pay Australia will provide the recharge voucher facility to subscribers using the new mobile SIM card service.

According to Yoganathan Ratheesan, Founder and Chief Executive Officer of Lebara Mobile, the company will target the large migrant communities in cities such as Sydney and Melbourne (a market worth around USD 250 million), which typically use calling cards for making international calls.

This will avoid cannibalisation with Vodafone’s local and international call services. Ratheesan added: “Cannibalisation only impacts where there is a huge market share already owned by your partner. If we can bring in USD 100 million from the calling card segment, and you cannibalise just 1-2% of Vodafone’s national traffic, there will not make a huge difference. Overall Vodafone as a company will benefit from this relationship.”

Lebara Mobile will offer international calling at 9 cents per minute, which is very near to the calling card sector’s pricing. Lebara, by offering lower rates, will have to compete with VoIP services providers such as Skype.

Commenting on the company’s pricing strategy, Ratheesan added: “With VoIP services such as Skype you generally need a PC and Internet and the same on the other side. The segment we are targeting is not that technologically advanced or as sophisticated as the general population and broadband penetration is low. Generally, the quality of service on a VoIP call is not up to that of a TDM mobile call where you have a direct interconnect. So it is a completely different product targeting different ethnic groups so they are different products not competing.”