Why Masan Group acquires mobile virtual network operator Mobicast

, Why Masan Group acquires mobile virtual network operator Mobicast

Masan said, the acquisition of Mobicast mobile virtual network operator is a strategic fit in the ‘Point of Life’ consumer ecosystem of the company.

Masan Group Corporation (HOSE:MSN), on Tuesday announced its entry into telecom by completing the acquisition of a 70 per cent stake in Mobicast Joint Stock Company for a total cash consideration of VNĐ295.5 billion (US$12.96 million) throught its subsidiary, the Sherpa Company Limited.

Related: Mergers & Acquisitions strategy in Vietnam.

Mobicast, which operates the Reddi brand, is a Vietnamese start-up full-service mobile virtual network operator.

Mobile virtual network operators such as Mobicast/Reddi are wireless communication service providers that do not own the wireless infrastructure and instead partner with traditional mobile network operators to use their radio spectrum-based transmission services and wireless network infrastructure to provide telecom services to consumers.

This is a win-win business model since mobile network operators increase network capacity utilization while mobile virtual network operators benefit from an asset-light business model.

Mobile virtual network operators are a common business model in the telecom industry globally: For example, mobile virtual network operators command a nearly 20 per cent market share of the UK mobile market.

Masan’s direct to consumer platforms Vincommerce, Techcombank and Phúc Long lack a true integrated product and service solution to serve its approximately 15 million digital-savvy consumers.

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The entry into the telecom sector lays the foundation for digitizing Masan’s platforms and building a unified off-to-online products and services solution, the ‘Point of Life’ consumer ecosystem.

By unifying its consumer base via Reddi/Mobicast, Masan has the capability to create a sticky loyalty platform to deliver more value to its consumers – the only consumer ecosystem that spans grocery and financial and digital services accounting for approximately 80 per cent of a consumer’s wallet.

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On a standalone basis, Reddi/Mobicast stands to benefit as it has exclusive access to Masan’s consumer base and physical and online nationwide touch points. This will significantly lower its consumer acquisition cost and enable it to use the savings to develop unique digital consumer solutions.

“Our mission is to develop the most efficient integrated O2O products and services platform to serve 50 million consumers throughout their daily journey by 2025. Reddi/Mobicast is the first step to digitalize our platform and synchronize our products and services into a unified offering” Masan Group CEO, Danny Le, told Vietnam Insider.

“While we are in the early innings, we have all the strategic components to develop the most cost effective consumer acquisition model thereby lowering the costs of our services and products for the benefit of our consumers – this is the definition of Point of Life.” Danny added.

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Mobicast was founded in 2016, the company obtained the license to operate the Reddi mobile virtual network operator network in 2019. The company focuses on service quality and customer experience and targets the younger and more digitally savvy consumer segment.

As the first digital mobile virtual network operator in Vietnam that invested to build a full E-mobile virtual network operator platform,  it aims to provide customers with a seamlessly integrated and holistic online experience with the goal of transforming into a super app based on core services such as mobile telecommunications.

Masan Group’s member companies and associates are industry leaders in branded food and beverages, branded meat, value-added chemical processing, and financial services, representing segments of Vietnam’s economy that are experiencing the most rapid transformational growth.

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