We can sustain profitability after Thai expansion: Buzzme CEO
By Goh Thean Eu September 26, 2016
- Expanded to Thailand recently, eyes Indonesia, Philippines, Myanmar next
- Shares lessons learnt during Buzzme's early years
Buzzme CEO Loke Yee Siong (fifth from right) with his team during the company's third anniversary celebration
Enabling Asia Tech Sdn Bhd, a mobile virtual network aggregator (MVNA), expects to remain profitable operationally after its subsidiary’s recent expansion to the Thailand market.
Buzzme, a wholly-owned unit of Enabling Asia Tech, is a mobile virtual network operator (MVNO). It launched its mobile services in 2013, and recently expanded to Thailand. It entered the market by acquiring existing MVNO IEC-3G for an undisclosed amount.
In less than three years since it launched its services, the company is already profitable operationally.
“We are already Ebitda (earnings before interest, tax, depreciation and amortization) positive. We expect it to be sustainable even with our expansion to Thailand,” said Loke Yee Siong, chief executive officer of Enabling Asia Tech.
A MVNO is a mobile service provider that does not own the wireless network infrastructure. It is able to offer voice and data services to customers by riding on existing mobile operator’s infrastructure.
At the same time, a MVNA is a company that provides network infrastructure and related services (such as network subsystems, business support systems, provisioning, administration and operations support systems) to MVNOs.
For Enabling Asia Tech and Buzzme, they are offering their services by ultimately riding on U Mobile’s network.
For Loke, one of the key things he learnt during his journey with Enabling Asia Tech and Buzzme is that one needs to be agile and make changes fast.
He also added that one of his biggest mistakes during the early days was to compete head on with the incumbents.
“The minute you (MVNO) think like them, you will start to lose. I think a lot of MVNOs also make the same mistake. The minute you play like the big boys, spend like them and all, you will lose,” said Loke.
Realising that competing against the incumbents is not a viable plan, the company changed its approach and strategy.
It then changed its focus on the younger market – those Gen X and Gen Y’s, but more importantly, its go-to-market strategy is more digital-centric.
“We leveraged a lot on digital marketing, social media, and so forth,” said Loke.
Currently, Enabling Tech Asia is also serving several MVNOs under its network, including Prabha Mobile, ECI, itel, MyAngkasa Mobile and TRI Mobile. (Enabling Tech Asia does not have stakes in these MVNOs, with the exception of BuzzMe.)
Focus on bundles and products
For RM25, users will be able to get 30 minutes of voice calls, 30 text messages, and 1.5GB of data. For RM50, customers will be able to get 60 minutes of voice call, 30 text messages and 4GB of data.
The plans are competitive with most of the telcos. Maxis’s Hotlink is offering 5GB of data for RM48 a month, while Digi offers 2GB and 3GB of data for RM28 and RM38 a month, respectively.
What makes Buzzme stands out is the way it reward its customers. For example, subscribers will be able to get 4 points after making RM20 worth of voice calls, 5 points whenever they subscribe to Smart Surf 1GB plan, etc.
Points can then be redeemed for free credits or merchandises.
Meanwhile, it is also awarding “free gift certificates” whenever customers reload a minimum of RM100 in a single transaction. The partners for these gift certificates include Centro Hair Salon, ZTE, Breakout Escape Game, Lancelot Tea-Guild, SanDisk, and others.
While the free gift certificate deal may be attractive, but it raises a question on whether will consumers bite the bait. After all, the average amount spent by prepaid users are less than RM50 a month.
So why would Buzzme customers reload RM100?
“When they do that, not only they can get the free gift certificates, but also a three months validity. So in other words, with RM100, they can get the free gift and also to talk and surf for three months,” said Loke.
Plans for the future
With Thailand expansion completed, the company is now eyeing on its next markets.
“We hope to expand to Indonesia by end of this year. We have identified the partner mobile operator. Unlike our Thailand expansion, which involves acquiring an existing MVNO, our Indonesia expansion plan is more about co-branding initiative with existing mobile operator,” said Loke.
Post Indonesia, it hopes to expand to Philippines by first half next year, and Myanmar by end of next year.
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