Diri, the phone company behind the virtual mobile operators (MVNOs) of three of the most popular youtubers in Mexico, is looking for financing. With the help of the crowdfunding site Play Business, the telecommunications company intends to raise a minimum of 10.6 million pesos to launch a new brand, improve its distribution channel and grow its working capital.
The telephone company, which lacks its own infrastructure, is behind Pillofon, the MVNO of Luisito Comunica, which has 36.7 million subscribers on YouTube, and Space Móvil, the operator of Kimberly Loaiza and JD Pantoja, who together exceed the 43 million followers on the video platform.
“Diri was able to get money from the typical powerful families of Mexico, but he decided to go the way of returning to the OMV in the Mexican network,” explains Joan Segura, founder and CEO of Play Business. “Anyone with 5,000 pesos can be part of an incredible, disruptive, innovative and growing business.”
For Alejandro Corsi, CEO of Diri, resorting to the crowdfunding platform not only allows raising money, but also fulfilling an important objective for the company: spreading its added value.
“We have the most economical plans and what we seek is to spread it, that we are a very important service for the consumer, that we cover their needs for 129 pesos per month (…) We want our investors to become ambassadors, help us to test future innovations and spread the benefits of the service “, mentions the executive.
The offer of Pillofon and Space Móvil is the same. There are four plans that range between 129 and 499 pesos. The basic service offers 5GB for browsing, unlimited calls and SMS, and data and minutes in the United States and Canada. The others include social media and even unlimited data.
A profitable business?
Virtual mobile operators (MVNOs) found the key to adding users in a space dominated by large companies: betting on a market niche. Some have focused on attracting unbanked people, others supermarket customers, and some more consumers seeking credit for a mobile device. Diri found a profitable business in the followers of Luisito Comunica, Kimberly Loaiza and JD Pantoja.
The company began operations in 2020. Data from the OMV itself indicate that it has grown 440% in the last six months, reaching more than 100,000 active lines to date. The figures coincide with the good performance of virtual mobile operators in the year of the COVID-19 pandemic, and contrast with the losses experienced by traditional ones.
According to the consulting firm The CIU, MVNO revenues rose 94.7% in the fourth quarter of 2020 compared to the same period of the previous year. In terms of lines, the increase was 53.1%. In this last category, Telcel was the only traditional operator that grew with 1.1% of net additions. Movistar and AT&T decreased 0.7% and 1.1%, respectively.
“Today, MVNOs have a greater understanding of how the market works, they know that competing with traditional ones is not a viable way to grow,” says Rolando Alamilla, market research manager at The CIU. “2020 was a very atypical year, in which different variables came together that helped MVNOs to grow, it was not only the health crisis, but also the economic crisis and the added value of these operators.”
The analyst explains that when users’ income goes down, they automatically look for new mobile phone options in the market. MVNOs appeared at this time with affordable prices and an attractive offer. In addition, with value-added services that traditional ones do not offer.
Diri’s offers have a clear objective: to make mobile telephony a lifestyle. The image of youtubers has allowed users to approach this service. Alejandro Corsi says that 95% of his clients come from traditional operators and decided to migrate because they felt an affinity with these characters.
“It is an important differentiation, we have several brands with which we reach different audiences, that distinguishes us from the rest of the market competitors, mainly from the traditional ones, people have no affinity with brands because there is nothing that matters to them and they end up jumping from one to another. We want to break that dynamic by creating lifestyle brands and creating user loyalty. In this sense, we are having a lot of success, ”says Yago Amerlinck, Director of Marketing at Diri.
“It is a product that meets specific needs and also has the support of favorite influencers. This is one of the most powerful concepts that have been seen in the mobile market to generate affinity and connect with users ”, adds Joan Segura.
Opportunity market
As of the first quarter of 2021, MVNOs in Mexico had 3.95 million registered users, which represents 3% of the total mobile telephony market, according to The CIU. This represents a growth of almost 70% in the number of lines in a single year.
Rolando Alamilla says that this boom shows a healthy market that evolves and adapts to the needs of users. “They grow not by selling refills, but by penetrating with associated services that help people.”
The analyst anticipates that the upward behavior of MVNOs will continue. But Erick de la Cruz, manager of the telecommunications consultancy Select, assures that the demand tends to normalize. “When people start to go out, consumption stabilizes, this means that there will be fewer users who use these offers. Although that does not mean that their participation will decrease, because of the contract, more virtual operators will continue to appear to a point that the market begins to mature ”, he indicates.
While that happens, at Diri they already have a new plan to attract the attention of a new market niche: gamers. “Loot Móvil is a new brand made by gamers for gamers. The powerful dynamic is that all plans, not just the brand identity, provide benefits related to video games, from products to rebates, ”explains Yago Amerlinck.
Diri’s goal is to reach 72,300 Mexicans -5.5% more in 2019- who are gamers with a punctual offer for their particular interests. 40% of the money they seek to raise with Play Business will go to this innovation.
