Lycamobile charts expansion into emerging markets and OTT services

Friday 29 April 2016 | 09:41 CET | Background

Just like traditional operators, MVNO Lycamobile is diversifying and expanding into OTT services in order to offer more value to its customers. In the last six months, the company launched the services Lycaremit, an online money transfer service; Lycachat, a VoIP app; and the entertainment service LycaTV. CEO Christopher Tooley told Telecompaper more about the company's progress at the MVNO World Congress in Amsterdam.

Lycamobile serves around 15 million active customers in 20 countries across Europe and the US. The most recent launch was at the end of last year in Tunisia, where it has reached 130,000 active prepaid subscribers in just six months, according to Habib Ben Lallahom, Executive Director of Tunisie Telecom, also speaking at the same congress.

Tunisia was the first country where Lycamobile worked with a local partner – Tunisie Telecom. In most countries Lycamobile works alone, although partners are needed for distribution. However in some countries, the company is seeing the need to partner, said Tooley. The MVNO’s strategy is always based on strong retail distribution in each country, in addition to an online presence.

The CEO said Lycamobile plans to continue to roll out globally via strategic partnerships with mobile network operators in other countries. It mainly targets countries where there is a high level of incoming mobile traffic and of course where regulation permits, amongst other issues. Areas of interest include the Balkans and Eastern and North African territories. Currently Lycamobile is in negotiations to launch in over 20 countries.

New OTT services: Lycaremit, Lycachat and LycaTV

In the last six months Lycamobile has entered the OTT market with a range of new services:

  • Lycaremit, an online money transfer service, was launched first in the UK at the end of last year. The service allows customers to send money to family and friends in over 50 countries using their smartphone, tablet or desktop at www.lycaremit.co.uk. Beneficiaries are able to collect money via banks, cash collection services or mobile wallet, depending on the destination country. It launched with an introductory offer of zero fees on all money transfers over GBP 300 for the first three months of service. ”Our initial customer feedback has been that it is a very convenient and low-cost alternative to traditional money transfer,” said Tooley.
  • Lycachat, a VoIP app, also launched at the end of last year. This allows users to make calls, send messages and share videos worldwide. It will be launched in all base countries and also countries where Lycamobile is not present. The app is designed to give customers more choice, but is more targeted to countries where the operator is not established. According to the CEO, the company does not see VoIP as a threat to its main service but more as an add-on. An innovative feature of the app according to Lycamobile is that users can top-up the app via the MVNO’s traditional vouchers.
  • LycaTV is its OTT ethnic entertainment service, first launched in the UK and Canada and has become recently available in Spain. It will only be launched in countries where the MVNO is active and where strong internet connections are available. LycaTV offers over 450 channels in 20 languages, making it the biggest platform for primarily ethnic-focused TV and movies in the world, according to the company. Lycamobile worked with Huawei on the delivery platform. All LycaTV content is available on mobile devices, smart TVs, desktops and streaming players. The offer includes live TV, 7-day catch-up and on-demand content.

Lycamobile: not the same challenges as other MNOs

Lycamobile is not experiencing the decline in traditional voice and messaging revenues seen across the rest of the telecoms industry, but rather is growing, its CEO said. This shows it’s operating in a very specific market segment with behaviour distinctive from the non-ethnic community. Nevertheless, “Lycamobile wants to embrace OTT in order to not make the same mistakes as the MNOs”, Tooley said.

Another big difference is that only 25 percent of its customers have smartphones, so data usage differs as only a small group uses data. As such, demand for 4G is also low, however where it can, Lycamobile wants to offer it. The focus is not on offering 4G at a premium, but rather free of charge, as is offered currently in eight of its 20 countries. Although only a small part of its customers are using data, the company is experiencing strong data growth and expects this to growth further as smartphone penetration increases. For the moment though, most customers rather prefer high quality and low voice rates, according to Lycamobile.

Lycamobile also sees minimal impact for the upcoming end to roaming in the EU, as its customers are very price driven and not strong in roaming, the CEO said. Customers often will not use their primary or second SIM and instead buy a local prepaid SIM. Also Lycamobile SIMs are already multi-IMSI, so when used while roaming in a Lycamobile country it is already cheaper.

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