Macquarie Group Ltd (ASX: MQG) is going to be launching its own mobile service to compete with the other telcos.
Macquarie Group is Australia’s largest investment bank with operations spread throughout North America, Europe, Middle East, Asia and Australia. Unlike a traditional ‘retail’ bank, like most investment banks Macquarie makes a large chunk of its profit by operating in the investment markets and managing ‘assets’ for individuals and organisations. As of 2018, Macquarie had reported a profit for 49 years in a row.
This is Macquarie’s Secret Plan to compete with other telcos
TPG Telecom Ltd (ASX: TPM), Amaysim Australia Ltd (ASX: AYS) and others need to keep a watch out because Macquarie is going to launch its own mobile offering according to the Australian Financial Review.
It’s not going to be called ‘Macquarie Mobile’, instead it will be named Nu Mobile. Why the ‘new’ reference? It will be quite different to most other Aussie telcos in that it will only be offering mobile packages that include a used phone. Apparently this is a popular offering in the US.
Macquarie is already in the mobile leasing space, so it makes sense to add a data offering on top of that. At the moment it leases over 1 million phones to other telcos, who then lease the phones to consumers.
Don’t be worried if you’re a Macquarie shareholder, it isn’t about to invest heavily in infrastructure. It will utilise the mobile network of Telstra Corporation Ltd (ASX: TLS). Utilising a large telco’s network is exactly how Amaysim, Aldi Mobile, Kogan.Com Ltd (ASX: KGN) mobile and so on do it.
The Australian Financial Review understands Macquarie has already started offering the service to staff. The wider public will be able to access the service in mid-2019.
Is this a good plan for Macquarie?
It makes sense to make even better use of the mobile phones that it is leasing, but it’s unlikely to become a major player the size of Amaysim unless it can offer lower prices than its competitors.
I think Macquarie is a great blue chip business, however at the moment this does not make me want to buy it any more than I did yesterday. I would rather consider one of the proven ASX shares in the free report below.
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