Adam Kidron, CEO at YO Mobile. Photo: YO Mobile/Courtesy.
Adam Kidron, CEO at YO Mobile. Photo: YO Mobile/Courtesy.

Mixing connectivity and entertainment, YO Mobile seeks to reach 250,000 subscribers in Mexico by the end of the year

The Gen Z-focused MVNO (mobile virtual network operator), launched in 2020, holds 500,000 registered users and 27,000 paid subscribers spending staggering 90 minutes a day on its platform. "Soul of telco, heart of content", as its CEO Adam Kidron described to LABS

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Home of the telecommunications group América Móvil, from businessman and billionaire Carlos Slim, Mexico used to have one of the most concentrated telco markets in the world. But in recent years, this landscape has started to change: América Móvil’s subsidiary in the country, Telmex went from a 71% share at the end of 2013 to less than half in broadband (45.6%) and fixed telephony services (49.4%) at the end of last year. The figures are from the country’s Federal Telecommunications Institute (IFT).

“We looked at the world and where there was a good regulatory framework [for the protection of young telcos], young people and huge adoption of streaming services. You have to think of Mexico as one of the top two or three countries in the world,” says Adam Kidron, CEO at the mobile carrier YO Mobile, in an interview with LABS.

Telmex’s reduction in market share comes as a result of a regulation IFT imposed on América Móvil, through Telmex, the fixed-line phone carrier; and Telcel, the mobile carrier, since 2014. Among other measures, the regulator required Telmex to share its infrastructure and provide the local access service at rates regulated by the IFT and affordable for alternative operators. While Telmex and Telcel are still the main players in the Mexican telco market, this opened room for fair competition in the country.

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Revenues from MVNOs, mobile virtual operators that don’t have their own infrastructure, increased by 98.7% in one year, while the number of lines grew by 69.9%. According to estimates by the consulting firm The CIU, at the end of the first quarter of 2021, they generated MXN 626 million in sales, an expressive jump compared to the MXN 315 million reached in the same period of the previous year.

And that is precisely the background for YO Mobile‘s launch in the country. A subsidiary of Yonder Media Mobile, a New York-based corporation with technical development offices in Minsk, Belarus and Kyiv, Ukraine, YO landed in Mexico in 2020 seeking to disrupt what a mobile operator stands for. To do so, it combines commerce, community, connectivity and content in a single platform. 

There is going to be a separation between infrastructure and service. We are going to see huge investments coming into infrastructure in Latin America. On the whole, we don’t have 5G, but the population wants it, it will happen. The investment will come, but the people that will make extra money will be the ones who put the services on top of the infrastructure. It is not possible actually to combine the two. If you’re investing in infrastructure, your only concern is that as many people use the infrastructure as possible. Now, if you’re young, we [at YO Mobile] are only really concerned that we have as big penetration in Gen Z as possible. That’s a very different thinking.

Adam Kidron, CEO at YO Mobile

Bringing together connectivity and entertainment, YO Mobile’s business model merges the traditional telco approach with content creation and curatorship. Apart from providing mobile services, it sets a community within its users through a program of daily and weekly content on topics such as cinema, gastronomy, sex, astrology and mental health – all of it through its mobile app platform, where their targeted audience, late Millenials and Gen Zs, can also find a curation of radio stations and city ​​guides, live chats, AR games, and rewards to redeem with the company’s own digital currency, called YOYO$. 

A particular edge with Gen Zs, YO has also a strong presence in social media firm gone viral TikTok, where it holds 143,000 followers in its account, launched in December. “By the end of 2021, we will have between 5 and 6 hundred thousand people on TikTok, which provides us with a unique understanding of Gen Z, because TikTok is the channel for Gen Z as much as Instagram is the channel of choice for Millennials. We get nearly 15% of subscribers from TikTok.”

Adam Kidron, CEO YO MOBILE
“Platforms and media are owned by people who are generations older than the kids that are consuming the media. And in the end, it gets patronized. So we tried to do something a little bit different,” says Adam Kidron, CEO at the mobile operator YO Mobile. “I don’t know if you’ve seen our kids who work here, but I think I am by 30 years the oldest person,” he jokes. Photo: YO Mobile/Courtesy.

YO mobile’s app is available for users whether they choose to subscribe to the service or not. According to the company, everyone has access to the same content. The difference is that, if a user decides to become a paid subscriber, it doesn’t matter how much content they consume, it doesn’t spend their mobile data. If they remain as a free user, the platform consumes their mobile data.

Prices for the mobile service that grants a 4.5G connectivity are MXN 15 a day; MXN 50 a week or if users choose to subscribe to a monthly plan, YO began, as of June, to charge them an optional rate that ranges from MXN 100 to MXN 500, in a “Pay what you can” format. 

“We have learned that to achieve our ambition to bring the best mobile experiences to all Mexicans, we must do our part to democratize mobile internet access, making YO Mobile even more affordable for all,” says Kidron, who explains that the new payment functionality “invites people who have a little more, to pay a little more for mobile service so that others (who have a little less) can pay less. We invite them to participate and encourage others to do the same.” In exchange for the extra payment, YO grants a special token to consumers that allow them to obtain YOYO$ (the company’s digital currency). In addition to giving access to different content, the digital currency can also be exchanged for mobile data and packages, as well as for other extras on the platform.

YO Mobile app
YO Mobile app display on service checkout. Image: YO Mobile/Courtesy

In December last year, when it first arrived in Mexico, the company gave access to its service for free to the first 10,000 people who ported their existing mobile numbers over to YO. Currently, it has 27,000 telco subscribers spending 90 minutes a day on its platform, 500,000 registered users (non-subscribers) and 1.2 million app downloads. 

“The average engagement of telcos around the world is 18 minutes a day (…) We just wake up in the morning and try to think of new things we can do to entertain people to keep them hanging around longer. Because every minute that they spend with us is the minute they’re not spending somewhere else. It’s really as simple as that,” sums up the exec. By the end of the year, the company expects to reach 250,000 subscribers in the country.

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Claiming to be a source of hyper-localized, curated, social and 24/7 entertainment, the company offers users a blend of radio shows, daily live streams and movies through partnerships with Sony Music, Cine Tonalá, Red Bull and brand ambassadors like Aczino, Dr.Shenka, Herly, Mika Vidente, Adrian Casas, and comedians from CasaComedy.

The parent company, Yonder Media Mobile, was founded in 2018 and currently has a team of over 70 people in the US, Belarus, Ukraine and Mexico – where it has about 30 content creators. It raised over US$13 million in seed capital so far to fund YO’s development and is currently seeking a US$20 million Series A round. 

Instead of solely selling connectivity, today, YO’s revenues come 90% from telco services, while 10% comes from non-telco: advertising, sponsorship, social comparison and product referral. Kidron, however, expects revenues to reach a balanced share of 50% from each strategy in a span of 12 months in the country. 

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As for expansion, although the company is focusing efforts on Mexico, it has its eyes set on other Latin American markets. “We’ll go from Mexico to Colombia, to Chile, to Puerto Rico, to the US, and then to Brazil,” says Kidron. “Then we will worry about the rest of the world. We will certainly go to Colombia this year. Whether we get to Chile until early 2022, I’m still not sure.”

YO Mobile app
YO Mobile app’s content sections, called bubbles (burbujas, in Spanish). Image: YO Mobile/Courtesy

Creating its own shows all the while licensing and curating content from other creators and distributors; YO Mobile classifies its content in sections, called bubbles. On its website, users also have a digital shop called YO Boutique where they are able to buy smartphones and other electronic devices.

The company said it has also grown its VOD library of movies and launched a UGC (user-generated content) section called BAILO!, a post-TikTok experience where dancers compete for daily and weekly prizes showing off their best moves. 

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“We see ourselves in the future as a bunch more progressive way of getting content. At the moment, the way you get content is kind of insane. You cobble together all these applications that are not related to each other, that don’t have a schedule that works with each other, that don’t have a defined way of earning and you have no idea how your data is being used,” the exec points out. “YO solves all of this. It brings everything together on a single interface.”