The Dutch business market for virtual operators (VO) has again become smaller, with the number of VO Sim cards down by almost 4 percent to 530,000 in the third quarter, as compared to the first quarter, according to the latest report from Telecompaper. Much of the contraction came from KPN’s gradual elimination of secondary brands, including Telfort Zakelijk and Yes Telecom. But in terms of providers, the business segment remains the one with the most VO players on the Dutch market.
Telfort stopped selling mobile subscriptions on 1 May while Yes Telecom will stop selling its services on 1 January. KPN also recently announced Telfort will disappear completely as a mobile player from January. Consequentially, the business VO market will likely be made up of smaller, independent parties in the coming year.
Smaller parties will look for reinforcement
These smaller independent parties, based on the number of Sim cards supplied by Voiceworks, are not standing still. Consolidation is taking place to guard against parties such as KPN and VodafoneZiggo. Voiceworks has been following this policy for a while. In the past few years, it has bought Intercity, Xenosite and 14IP, among other companies. Last year, Voiceworks parent Within Reach Group (WRG) merged with Germany’s Swyx and then went on a takeover path in a number of European countries. Voiceworks had nearly 90,000 Sim cards in the third quarter. It wants to reach 150,000 Sim cards, with a strong focus on the fixed-mobile offerings.
Galaxy acquired, mobile connections of less importance
Galaxy Group is a lot smaller than Voiceworks, based on Sim cards. The company, based in Lelystad, was acquired by EDPnet at the start of this year and said it has expanded and substantially changed its portfolio. Galaxy Group has direct access to KPN's WBA, has its own VoIP platform and is working on more fixed-mobile integration. Even before the acquisition by EDPnet, the company was already phasing out its MVNO activities, with the focus already on a private cloud hybrid infrastructure. It is therefore not surprising that the number of Sim cards has fallen. Mobile services are only part of the services sold by Galaxy/EDPnet. Not all customers want mobile connections for all their employees.
Eilie remains stable
Meanwhile, Groningen-based company Eilie recently joined the Sollie Group. Based on the number of Sim cards, Eilie has remained stable over the past years. The company also provides VoIP and fixed internet, making it not solely dependent on mobile. The company also provides 4G mobile internet so that business customers in rural areas can connect to the internet without a fast fixed internet connection. The question is of course whether such a proposition is future-proof, considering the deployment of fibre networks by KPN, E-Fiber and Glasvezel buitenaf. The 4G offering for outlying areas is therefore probably an intermediate solution. The number of Sim cards will most likely remain stable, but the company will, under the umbrella of Sollie, probably continue its focus on a wider range of services, just like Galaxy and Voiceworks.
Truphone continues to grow
The UK’s Truphone is -together with Voiceworks- one of the few business players that has grown, in terms of Sim card numbers. That is remarkable since the company, and its promotions, are no longer so visible in the Netherlands. During the launch of the brand in the Netherlands, the company became very active with its marketing. The reason for the current growth could be cross-selling with IoT applications. The company has primarily focused on this product segment and has thereby received an easy sales channel for the "traditional" mobile subscriptions. International companies operating outside the EU are of course interesting for a player like Truphone.
Private Mobility and SpeakUp both stable, not dependent on mobile
Finally, both Private Mobility and SpeakUp were stable in terms of active Sim card numbers. Both players mainly supply fixed-mobile services. As an MVNE partner, Private Mobility delivers to parties who in turn offer IT sercices to end users. SpeakUp said goodbye years ago to its focus on mobile-only and has since operated a broad portfolio of business telecom services. Its Sim card numbers are therefore integrated into its total offerings. New player Public Mobility also acts as an MVNE, but focuses more on data connectivity services.
Forecast for 2020: more consolidation
Telfort Business and Yes Telecom will both disappear in 2020, or 2021 at the latest. The business VO market will therefore get considerably thinned out in terms of Sim card numbers. With the disappearance of the two brands, KPN may be preparing itself for an acquisition in this playing field.
Voiceworks will probably continue on its acquisition path. Parent company Enreach will look around at home and abroad fortakeover candidates to make the company bigger and give it more value.
Finally, market watchers will be looking at what foreign parties such as Gamma Communications and Destiny will do. Both are already active on the Dutch market, Destiny with OZMO and Motto and Gamma with Dean One. Both companies could with an acquisition on the Dutch market create a new dynamic.
