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amaysim Australia Ltd Annual Report 2016

6

Operational

Overview

Setting the pace with compelling

plans and subscriber growth

The BYO handset mobile services market

continued to grow throughout the financial

year. According to Telsyte, over 85% of

Australians own a smart device

1

, with 65%

of people switching providers choosing no

lock-in contract plans

2

.

As the amaysim Group capitalised on the

growth of the BYO category which amaysim

pioneered, the Group subscriber base closed

at 966,000 as of 30 June 2016, rising to over

985,000 as at 18 August 2016. Putting this

into market perspective, the Group now

accounts for over one quarter of the MVNO

market and 3% of the total mobile services

market.

This growth was driven by the Group’s

compelling plans which set the pace in a

broadening addressable market, across

price-points ranging from $15 for the wallet-

conscious to $50 for the data-hungry.

Solid net subscriber additions in a dynamic

market came through a combination of

smart, data-drivenmarketing, brand activity

around the ‘amazingly simple’ platform and

an ongoing focus on customer experience

and the average monthly churn reduction.

This customer-centricity is evident in churn

levels across the Group falling from 3.5% to

2.5% year-on-year, as well as the amaysim

brand achieving industry-high customer

satisfaction levels.

Network Services Agreement (NSA)

The strength of the Group’s NSA with Optus

was yet again validated in FY16. The Group

leveraged its two price reviews per year to

maintain a competitive edge in a dynamic

market. The results are evident in the ongoing

refresh of amaysim’s suite of one-decision

plans and Vaya’s market leading plans.

amaysim’s portfolio was strengthened in

November 2015 and March 2016 with new

products, extra data and international

voice and SMS inclusions. Vaya’s plans were

improved in February 2016, and again after

the end of FY16 in July and August.

This ongoing refresh of plans was executed

while maintaining strong gross margins

across the Group, resulting simultaneously in

increased subscriber value and commercial

returns.

Operational efficiencies gained

through a scalable online-driven

business model

The Group continued to focus on driving

efficiencies

through

multiple

levers,

including its online-driven business model

and technology-led scalability. Recurring

online subscription based payments made

up 83% of all payments received in FY16.

This reflects the growing relevance of

the Group’s subscription-based recurring

revenue model favoured by leading global

technology disruptors.

This model is supported by a simple-to-use

online platform which allowed the Group to

scale and serve an established and growing

subscriber base. Over the year, amaysim’s

LiveChat customer satisfaction month-on-

month average exceeded 94% and more

than 89% of amaysim subscribers said

they would recommend the brand to their

friends and family. This further illustrates

that the Group’s increasingly online business

model continued to resonate with a growing

audience.

Online

performance

marketing

and

acquisition activity, along with a disciplined

approach to attracting quality subscribers,

also factored into the Group maintaining a

low cost per acquisition.

Strong free cash flow generation

enabling acquisitions and dividend

payments

The full year result is characterised by strong

free cash flow generation that has enabled

the successful acquisition of Vaya, and the

payment of interim and final dividends.

In January, amaysim completed the

acquisition of Vaya, a price-fighting brand

in the sub-$30 segment, bringing a pure

value proposition to the Group’s portfolio.

1. Telsyte Australian Digital Consumer Study 2016; over 85% of 19.3 million Australians aged 16 years and over

2.Telsyte Australian Mobile Services Market Study 2016

Highlights

•• Subscriber growth as the

structural trend of BYO

growth continues

•• Successful leverage

of Network Services

Agreement to maintain

profitable competitiveness

in a dynamic year

•• Operational efficiencies

gained through a scalable

business model and online

leverage across marketing,

customer experience and

operations

•• Acquisitions broadening

the addressable market

and extending the Group’s

offerings

•• Strong free cash flow which

afforded dividends and

acquisition opportunities