The usual quarterly take over speculations are here:
"Investors currently pay for the value customers generate to amaysim alone, ignoring the value generated for mobile networks who could, in time, pay for what the market ignores.
amaysim, in other words, generates far more value than it captures.
There is a decent case that amaysim should be judged not by its own profit but by the value it generates from its customers, most of which accrues to network operators. That opportunity was present when we first upgraded the stock and it remains present today.
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For $200m, one can buy a mobile customer base that puts at least $150m of revenue per year into the hands of networks. And that ignores decent profits from energy. The fixed cost economics of mobile networks mean that revenue comes with high margins and, by improving utilisation, every additional customer makes the network more profitable.
Optus, Telstra and TPG-VHA should all be looking at amaysim as the last chance to buy one million customers in one go.
We note also that amaysim’s network agreement with Optus expires in 2021 and a renegotiation of that contract should be well under way by 2020 if it hasn’t already commenced.
When amaysim first negotiated that contract it was a fledgling, profitless reseller completely dependent on the Optus network. Today, it is the largest MVNO on the market with 10% of Optus’s customer base and a large chunk of its growth.
The relative balance of power has shifted and amaysim is in a better position to cut a better deal. Any decline in network costs flows straight to the bottom line and could significantly increase earnings.
Alternatively, amaysim could shop its customer base around to other networks. The inclusion of energy opens up other potential partnerships. Both AGL and Origin, for example, have started telco subsidiaries and could be potential suitors.
amaysim itself appears to have recognised the strategic value of its customers. It has raised $50m of fresh capital to repay debt and to ramp up marketing.
It appears the business will seek to raise customer numbers and then either sell itself to the highest bidder or switch its service to the lowest priced network. The status quo is unlikely to remain."
