MVNOs won't be around much longer, says Vodafone Australia CEO

With the chaos surrounding the end of ISPOne and Kogan Mobile, Vodafone Australia CEO Bill Morrow believes that the time for MVNOs is near over.

"I don't believe that MVNOs, the way they are structured today, are going to be around too much longer," Morrow told TechRadar.

Speaking of Kogan and Telstra, he said: "I just don't think that what Kogan is offering from a price point of view, with the way consumers would use their product, is a sustainable model."

He explained, however, that the market is moving to become data-centric, but due to the cost of the data network, MVNOs are no longer a good business model.

"I know the cost of the [data] network… You can't stay in business if you can't recover the cost of what the network is. It doesn't surprise me at all that Telstra is taking the position they are, that ISPOne is having to do what it is having to do right now."

"So I think it is quite normal, and is market forces doing what they should do."

Shifting focus

With the closing of Vodafone MVNOs Red Bull Mobile and Crazy Johns earlier this year, Vodafone's position was reinforced by Morrow, who said that Vodafone Australia will not be signing on any more MVNOs in the future.

"Our strategy is not to go out and sign up any more MVNOs. That is not a key focus."

But while he said that Vodafone will retain a number of the telco's current MVNOs, each contract will be re-evaluated as their time comes up.

"There's a few of them that are really particularly niche players, and those I'd love to sign back up. But it is not going to be huge discounts - it's going to be taken into account the data consumption, the data cost. So there's definitely going to be some changes going forward," he said.

The VoIP competition

While Kogan has itself expressed concern about the end of network competition for users as MVNOs disappear, Morrow believes there will be a new kind of competition in the market.

"I think competition is good, and having choice is really important for consumers - but I think a different type of competition is going to come in," he said.

He believes that on-top VoIP and messenger apps, like Viber and Whatsapp, will be the new frontier for voice and text/SMS use, with network carriers shifting focus to data.

"No longer the MVNO classic, but an over the top application type of application," he said.

"This is a fundamentally different market place for MVNOs. Mark my words, there's going to be far fewer."

• CEO Bill Morrow has validated our thoughts on the bleak future of MVNOs.