MVNO Lyca to splash £250 million to grow its business

• MVNO market poised for growth, Lyca wants a big chunk of it
• It’s going to spend large on its technology platform to develop new “bespoke products for consumers"
• IBM and SAP are helping it transform and develop a commerce cloud

On the face of it, the virtualisation of the fixed part of the mobile network (where all the game-changing slicing, service assurance and so on will take place in 5G) could be a real boon for the MVNO business model (for both sides of the bargain plus MVNO users). It should grant the dynamic flexibility that would make MVNO integration much easier and MVNO service differentiation more effective. However, going virtual certainly isn’t the only route - or at least not the only thing to stress in your marketing.

Last year in the middle of the pandemic we profiled MVNO Lebara which was in the process of cloudification (for all the usual reasons) and was junking much of its then current telco and BSS gear and going cloud native - gradually moving everything to AWS.  

According to Group CTO Torsten Minkwitz, the classic telco appliances the company had deployed required constant upgrades:  “Every five years you need to replace your hardware and then your software is out of support and you need to upgrade that. It’s all very, very expensive.” (See - One Mobile Virtual Network Operator is going completely virtual).  Cost savings, rather than business expansion, informed much of Lebara’s technology strategy and Torsten calculated that the cloud native journey was set to save half of Lebara’s capital spend.

Now that the pandemic is (sort of) behind us, it's interesting to hear that the biggest global MVNO (with 16 million subscribers), UK-based Lyca Mobile, has announced that it’s set to spend £250 million over the next three years in expectation of major market growth.

Lyca Mobile is just one part of a group of companies which includes healthcare, finance, travel, and entertainment businesses

It sees the development of a state-of-the-art technology platform as a crucial underpinning for its mobile business enabling it to develop new “bespoke products for consumers in the UK and beyond.” No explicit reference to cloud technology or 5G is made, although it could be in there somewhere appropriate.

It says that with the help of IBM and SAP, Lyca is transforming its systems and developing a commerce cloud. It’s also going to spend money on a new brand identity “that reflects a fresh, modern look that will appeal to a wider group of customers and will align more closely with the brand’s digital-first approach to its growth.” That sounds like less stress on marketing to ethnic niches which aren’t necessarily the place to find growth, more on aligning the brand with things like streaming content and multimedia games and so on. The company is also going to splash £25 million on a multi-channel advertising campaign running across TV, radio, out of home, digital and in-store activity.

“Covid-19 has expedited the emergence of a new set of consumer mobile behaviours and values. Customers expect more diverse, differentiated and value-added services – and there’s a real opportunity for us to deliver exactly that as we look to grow our market share in the UK and beyond,” said Lyca Group CEO Navanit Narayan.