Brisbane-based wholesale provider 2SG is using a more flexible pricing model from its mobile network supplier Optus to drive sales of mobile broadband to the small carrier and ISP market. The company is also preparing for the launch of its own 5G wholesale service in 2019.
2SG GM Reza Lohrasb told CommsDay the company was benefiting from the growth in mobile broadband as a business failover solution but also as a growing option in the consumer space as an alternative to fixed line connections.
“We renegotiated our agreement with Optus and it’s been a game changer and allowed us to introduce a new aggregated offering to our wholesale customers,” Lohrasb said. “We’re already seeing strong take -up from the market, especially around the failover solution, and anticipate strong continued growth, particularly with the introduction of 5G in 2019.”
Lohrasb said that the new aggregated offering enables service providers the control, flexibility and economic models that were previously only available to the mobile carriers. It is offered as either a layer 2 or layer 3 service.
The layer 2 offering gives the service provider total control over the session and product offerings, while the managed layer 3 service is a turnkey method for providing services with minimal upfront integration required.
Lohrasb suggested that previously, set-rate plans for business or consumer failover service were too expensive; but that allowing for packages where the provider only pays when used made them more attractive. He also noted that the trend in 4G was downwards in terms of pricing, which had driven lot more demand in the consumer market.
“There’s no doubt that the wireless broadband market is picking up and likely everyone else we’re interested to see what happens when 5G comes along,”
the MD said, adding that 2SG has already been in talks with Optus and expects to offer services around the same time as its network supplier.
“We saw it with 4G that Optus was very prompt in allowing us to offer a wholesale 4G offering and I expect it will be the same with 5G.”
2SG offers a number of different wholesale services to the carrier market, including Internet of Things and machine-to-machine connections as well as NBN wholesale services. However, he said the company was currently more enthusiastic about mobile broadband than NBN services given the greater potential for margin.
“NBN is something of a “necessary evil” and under the current model it’s not great for profitability. With mobile broadband we get a better net margin and we have fewer support costs. It’s also something we can provide in as little as two weeks, so for us the service we’re likely to push is mobile broadband,” Lohrasb said.