Telstra to launch low-cost mobile brand

Telstra is set to make a major play for the “price-sensitive” end of the mobile market by launching services under its no frills Belong brand.

CEO Andy Penn today announced the creation of Belong Mobile, in a move that appears at least partially aimed at countering the launch of TPG’s mobile network and the growth of mobile virtual network operators (MVNOs) like Amaysim.

“Our markets are continuing to evolve rapidly,” Penn said.

“The competitive dynamics have intensified, we’re seeing new entrants in both mobile and fixed, and pricing pressure in all sectors through price reductions, value enhancements and increased data allowances.

“As a result, and building on the success of Belong Fixed in attracting new fixed broadband customers with simple no frills offers, we will be launching Belong Mobile in the price sensitive segment of the mobile market.”

Penn estimated that the price-sensitive portion of the mobile market could account for “25-30 percent of the total mobile market” by 2020.

He did not provide specifics on the types of products that Belong Mobile would offer, the expected average revenue per user, or the part of the Telstra network that its customers would be allowed to access.

Penn said he wanted Telstra to be "very strongly positioned to respond" to new entrants; TPG will imminently ascend to become Australia’s fourth mobile network operator.

“We will be providing more details shortly but we’re very excited about the opportunities available for Belong Mobile and we believe that it will be as successful as Belong in the fixed market,” Penn said.

The launch of Belong Mobile will put Telstra in a similar position to Optus, which runs Virgin Mobile as a low-cost brand for its own mobile network.