European mobile phone company Lebara Mobile has launched into the Australia market, targeting expatriates with cheap pre-paid international mobile phone rates.
The company, which has $400 million in global revenues, will partner with Vodafone Australia to become a mobile virtual network operator, not unlike Crazy John’s, which also buys network capacity in Australia from Vodafone.
While using Vodafone’s network will allow Lebara to offer Australian users the ability to make calls here, its main game is international mobile calls. Australian users calling overseas will be able to tap into the company’s international network, which offers rates as low as 5c a minute.
Lebara Mobile’s founder and chief executive Yoganathan Ratheesan says the company was attracted by the size of the Australian market – five million people living in Australia and the mobile calling card sector (currently the most popular way for Australians to call overseas) is worth $250 million a year.
“That makes it really interesting for a company like us that is predominately targeting international calls. Nobody, whether it’s the mobile network operators or the calling card players, have a product like ours,” Ratheesan says.
A side benefit for the company from its Australian expansion is the fact it will improve utilisation of its British network infrastructure.
“We don’t need to put in additional infrastructure in the UK, simply because of the time difference,” Ratheesan says. “How many operators in the world are really maximising the capacity?”
The greatest challenge for the company will be marketing. Lebara is planning a decidedly grassroots campaign to try and tap into the powerful word-of-mouth factor within ethnic communities.
“Our marketing strategy is trying to get through to the influential people in those expat communities. The word-of-mouth is really, really big in our sector.”
The company has targeted a number of shops within ethnic communities that cater to large numbers of expats, and has a team of 40 marketing staff on the ground (including 25 in Sydney) talking with shopkeepers and promoting the brand.
“One of the main reasons for churn is that there are companies that mis-sell in the first place, and customers get disappointed and leave,” Ratheesan says.
“We really want to get it right from day one.”
Related articles:
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
