The rumour du jour is that Apple will set itself up as a mobile carrier for iPhone buyers. I have my serious doubts about the veracity of the tale, but for the sake of argument, how would they go about setting up shop in Australia?
You can read the story over at PC Mag Australia, but the basic idea as reported is that Apple would set itself up as a reseller of one of the larger US networks as a MVNO — a Mobile Virtual Network Operator, in other words.
There are plenty of MVNOs in Australia; if you’re a user of Yatango, Amaysim, Lebara, AldiMobile or Woolworths Connect, you’re on an MVNO, utilising the networks of Optus, Vodafone and Telstra respectively. As such, couldn’t Apple join forces to set up… I dunno… iPhone Phone Co?
Yeah, they’ll probably have a snappier name than that. Bear with me here.
I doubt it. I have serious doubts that Apple’s particularly interested in this business area, although that’s totally just gut feel and not in any way informed by anything Apple’s ever said to me. Officially speaking, Apple’s apparently told CNBC that it denies any MVNO plans. It’s rare for Apple to comment on anything at all, which is why so many stories about Apple include lines about “Apple not commenting on rumour or speculation”. For decades, that’s been Apple’s official go-to line when it doesn’t want to comment one way or another, or at least the on-ground marketing people don’t want the folks at Cupertino to slice them up into tiny pieces. Ahem. Allegedly. Metaphorically. I’m almost entirely certain nobody’s been actually diced.*
It did, however, get me thinking about how you’d apply an Apple MVNO model to the Australian telco landscape as it stands. This is purely a thought exercise, however. I don’t particularly think they’re going to go down this path, but I’m ready to be wrong if I’m wrong.
Apple won’t build any infrastructure. Frankly, pending a 5G or 6G technology change that mandated entirely new towers and transmitters, I doubt anyone is going to take on Telstra, Optus or Vodafone in this respect, simply because the overall costs of implementing a new network, both in gaining spectrum and building the actual physical infrastructure is immense. Apple has oodles of money, but it also has shareholders that would wonder why it was spending what would be billions of dollars building a competing Australian network at all. Won’t happen, and that I’m entirely confident on.
That leaves the MVNO path, and there I can break it down by carrier.
Telstra did just announce that it’s going to bundle Apple Music with iPhone plans as a twelve month freebie. That’s a model that an Apple MVNO might go down, because it ultimately sells more Apple products and services, and if there’s one thing that Apple understands, it’s keeping things within the ecosystem.
Telstra has an MVNO division, Telstra wholesale. It’s the network behind AldiMobile, Woolworths Connect and the late Kogan Mobile, and it claims a wide Australian coverage map because, well, it’s Telstra.
Match made in heaven, right?
Nope. The issue with Telstra wholesale is that it famously only uses “parts” of the Telstra network, and only the 3G capability of that part. It’s essentially there so that Telstra can rent out the lesser-used parts of its networks to MVNOs interested in providing a low-cost, low speed service for seriously budget-strapped buyers. That’s fine as it stands, but Apple isn’t exactly known as a low-cost, budget buy. That’s not what the brand is about, and the chances of Apple tying its most profitable line — iPhones — to an ancient network technology are somewhere between slim and none.
What about Vodafone? There I could see some tieup simply because Vodafone as a worldwide entity could strike multiple deals, but within the Australian context again Apple would be settling for a network with some serious limitations. Not so much in a “Vodafail” sense, but simply because Vodafone didn’t bid for (and therefore didn’t get) any of the 700Mhz “digital dividend” network when it was on offer, spending its cash instead on network upgrades. There are only a few Vodafone MVNOs left, and none that I’m aware of that resell the 850Mhz 4G that Vodafone has to offer.
Again, I can’t quite see Apple settling for an MVNO that only worked with some network bands.
Then there’s Optus, which, realistically might be the network of choice for Apple’s theoretical iPhone Phone Co. Optus does resell its 4G capability through its MVNOs, with both Yatango and Amaysim offering 4G Optus network hooks. Virgin Mobile’s on the same network, but it’s wholly owned by Optus in the first place.
Optus would appear to tick all the boxes for an Apple MVNO locally, although again there are issues with overall 4G coverage, where Telstra’s regional coverage well and truly beats that of Optus. Maybe Apple will only care about the metro users? No, that’s not much of a way to sell a telco if you’re in the premium brand space that Apple occupies.
The final problem here, however, is that for Apple to jump into the MVNO space, it’s got to be willing to hitch up with an MVNO provider. iPhone sales are quite big business each and every year, whether you like that or not, with a lot of Australian users happy to upgrade every other year or so — typically when their contracts expire — with any of the big three carriers.
Signing up with Telstra, Optus or Vodafone as the “preferred” partner by way of MVNO runs the risk of jeopardising all those tasty iPhone sales across the other two jilted carriers. No, I don’t think they’d dump the iPhone out of spite. It’s too valuable for that, but I’ve little doubt it would be less emphasised if another carrier is more significantly in bed with Apple in the first place. Under that scenario, Apple might make a little in MVNO cash, and lose a whole lot more in handset sales.
Apple likes money — of that there’s little doubt — but especially money it can make upfront in hardware sales. The business is built on that premise, and messing around in the MVNO space isn’t likely to generate enough to make it worthwhile in the first place.
*Allegedly. With an extra dose of allegedly, just to keep the lawyers off my back.