I'm pretty sure what you guys were talking about is the 'two step protect' changes to DCB. These essentially give consumers another message to confirm their DCB purchase. Not suprisingly, this really hurt returns because a big part of the business was churning customers that accidentially subscribed to services or bought one off purchases like games. This resulted in large turnover of customers once they realised they were being charged at the end of the month unintentionally, or they were over the service then unsubscribed/discontinued to pay.
This lead to the need for MBE to be constantly spending money to aquire new customers as the recurring revenue of the DCB business model was weak. If you were being cynical, you could say they needed to keep trapping people into high priced/low quality games and subscriptions. This is why when the company mentions the returns are not attractive enough to continue, they mean that it costs to much to acquire customers now that far less customers engage their services because they get a chance to reconsider!
Once again being cynical, in international developing markets these consumer protections would not yet exist so there is scope to go off shore and play the same game. Obviously, this was the plan to aggressively roll out internationally but the core Aussie business died in the ass putting a halt to that, given cash preservation became priority.
Now MBE is pursuing a sustainable business model of performance marketing which is great. The acquisitions they have made in this area, by last reports, appear to be good moves. It is going to be important for the company to explain to investors the growth prospects for these businesses and provide guidance on that for MBE to be properly valued.
This is my take on what happened and I would welcome anyone else to add and/or correct anything here.
