For those of you who have BOOST MOBILE SIM PLANS after my recommendations, you may be asking what happens now that TELSTRA have “bought out” BOOST MOBILE?
It’s been a week since Telstra announced it would be acquiring its partner Boost Mobile in a deal said to be worth as much as $140 million. Naturally, there are big questions about what this means for the local telco market.
In my opinion, I don’t see huge changes to the status quo. It is good to understand the background ot the two entities and how they work together.
Firstly, TELSTRA and BOOST are basically the same company with TELSTRA providing the Network Operations, Billing and Customer Support whilst BOOST is providing the Marketing / Branding to the Product.
It was the same when I was at OPTUS and BOOST was our pre paid brand that was offered at affordable rates which appealed to the younger market who didn’t want to fork out big money for month to month Post Paid Plans
Think of the relationships between
- QANTAS and JETSTAR.
- FOXTEL and BINGE.
- FOXTEL and KAYO SPORTS
The three entities on the left are the more pricier offering whilst the right are the more cost effective options that are appealing more to the younger market. Very similar then to TELSTRA and BOOST MOBILE
To start, I don’t think Telstra’s purchase will significantly change competition in the mobile space. While consolidation can have negative impacts, Telstra was already responsible for Boost Mobile’s pricing and product roadmap. Boost mobile plans may be cheaper than Telstra but – by and large – they’re more expensive than what truly independent Telstra MVNOs ( such as ALDI and BELONG ) have been charging.
This also means Telstra doesn’t have much incentive to change unique selling points like the fact Boost is the only MVNO with access to the full Telstra network. Every other Telstra-powered provider uses a slightly smaller footprint which means they have less coverage in regional and rural Australia.
The BOOST selling point for me was price, mobile coverage and included International Calls, something my Migrant clients loved!!
If that advantage goes away but Boost’s pricing stays where it is, there’s less of a reason for customers to stick with Boost. That would be bad for Telstra, as the customer base is likely the main reason it purchased Boost.
So for now, I wouldn’t be too worried about the change. All of you are already in the 365 Day Plan cycle so nothing will change up until your Plan expiry date and to be frank, I don’t see TELSTRA trying something new that may jeopardise the reason why they purchased BOOST in the first place and that is because, it has a huge customer base and that it is very profitable.