Budget telco Amaysim just bought Vaya for $70m and stocks are up 20%

Shares in Amaysim jumped 20% after the mobile operator announced it would acquire prepaid mobile player Vaya, lifting its customer base to 1 million.

The budget telco is paying $70 million for Vaya, adding around 140,000 new customers, and bringing it close to its 1 million customer target much sooner than its initial aim of 2019.

The telco’s stocks are currently trading at $2.78 as of Monday afternoon, bringing the company’s value to around $480 million.

Vaya’s brand will still operate, targeting the extreme low cost end of the prepaid mobile market, while Amaysim will continue to target the $30-$50 per month sim-only market.

Amaysim will assume $50 million of liabilities to Optus as part of the Vaya deal.

Amaysim is the largest mobile virtual network operator in Australia, or MVNO. Running off excess Optus mobile spectrum, it became increasingly popular by pushing low-price plans with lots of data before customers even knew it was what they wanted.

MVNO’s themselves work by paying wholesale prices to use excess spectrum owned by Optus, Telstra or Vodafone, which they then sell at a retail price under their own brand. Most MVNOs only provide the mobile service themselves, meaning customers can bring their own phone and there is no financial barrier

The MVNO is then responsible for everything else, including setting pricing plans, operating a support call centre and any marketing or retail distribution.

Because there is such little room for profit in these deals, with both the network owner and MVNO looking to take a cut, MVNOs often go bust.

Outside of Amaysim, other big competitors include Woolworths Mobile, Aldi Mobile and Coles Mobile.

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