The Sherpa Company, a subsidiary of Vietnamese retail giant Masan Group, has acquired a 70 per cent stake in lcoal mobile virtual network operator (MVNO) Mobicast for VN295.5 billion (US$12.96 million).
Under the new transaction, Mobicast, operating under the brand Reddi, will gain exclusive access to the group’s consumer base and physical and online contact points across the country.
This will decrease Reddi’s consumer acquisition costs considerably, allowing them to reinvest in developing innovative digital consumer products and a customer care experience platform.
Meanwhile, Masan will have the capacity to develop a sticky loyalty programme by unifying its consumer base via Reddi. The deal serves as a stepping stone for the retail group to digitalise its platforms and create a comprehensive off-to-online (O2O) products and services package – “Point of Life”.
Founded in 2016, Mobicast launched Reddi in 2019 as the country’s second full-service mobile virtual network operator (MNOV). The startup uses the mobile phone infrastructure of the State-owned Vietnam Posts and Telecommunications Group (VNPT).
Reddi focuses on providing digital services solutions for young and modern customers through the mobile app platform. It also aims to transform into a super app based on core services such as mobile telecommunications.
The company also boasts of employing the most up-to-date technologies such as 5G, IoT, e-sim, or mobile money to promote the freedom of users’ experience and personalisation.
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MNOVs such as Reddi provide value-added wireless communication services without owning the cellular infrastructure. Traditional mobile network operators (MNOs) collaborate with MVNOs to deliver telecom services to customers using their radio spectrum-based transmissions and related wireless network equipment.
This is a win-win situation for both MNOs and MVNOs and a standard business model in the telecom space globally. MNOs gain from increased network capacity utilisation, while MVNOs benefit from an asset-light business model.
Masan claims to have a consumer ecosystem spanning grocery, financial and digital life, accounting for approximately 80 per cent of the consumer wallet.
In Vietnam, the group possesses an expansive offline distribution channel of more than 2,400 WinMart, WinMart+ retail stores (formed through 2019 merger of retail arms with Vietnam’s largest conglomerate Vingroup) and more than 300,000 general trade retailers.
According to the group’s statement, the deal marks Masan’s maiden investment and entry into the telecommunications industry.
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Image Credit: Mobicast
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