MVNO plans to add several hundred thousand users this year
Advertising-funded airtime provider Ovivo has set itself a financing target of £3m, as part of its plans to bring the service to “several hundred thousand users” this year.
Chief executive officer, Dariush Zand revealed the firm’s future development plans to Mobile News. The Vodafone MVNO, which raised £1m in early 2013, delivered its 50,000th SIM to customers in January and it has big plans for the next twelve months.
“Now is the time for us to expand the business in the UK, increase our customer base and also begin to look at the possible international expansion of the business going forward,” Zand told Mobile News.
The company offers a variety of calling, text and data bundles for a £20 upfront fee, £15 of which remains as a credit balance. Customers can receive monthly calls, texts and data allowances for no monthly charge, but can add to the allowances by topping up. Users are then targeted with advertising via their web browser based on their age, gender, location and browsing history.
The firm has appointed Strand Hansen to lead the financing round, as it seeks to raise the £3m by Easter. It will use the additional cash to scale up the business and add key personnel to the business.
The company founder believes that all of the conditions are now in place for a change in the business models for mobile tariffs.
He claims: “The timing has never been right. Either the mobile advertising industry was not as established as it is now, the smartphone hadn’t happened, (or) the application revolution hadn’t happened.”
Zand is reluctant to provide forensic detail on the company’s performance citing them as confidential. For example, he can only say that a “substantial percentage” of the 50,000 SIMs are active and, commonly for start-ups, will not provide details on profitability.
He explains: “We are established …… Profitability from a company’s perspective means are we achieving our potential, not only are we in the black in terms of our P&L And, we are not achieving our potential yet because the potential is so huge.”
The operator’s terms and conditions allows it access to browsing history and the use of ad-blocking software is strictly prohibited. Repeat offenders of the latter will have their service terminated. High users of data also have their speeds restricted to keep overall service levels at a minimum standard.
The current business model depends on heavy web-usage and Zand says the subsidised nature of the service encourages this.
“Our customers are very engaged with mobile browsing, 68 percent browse on a daily basis and 38 percent buy things from their mobile devices every single week,” he states.
It hopes to have the financing in place by Easter.