Carphone's iD MVNO set to hit Three UK where it hurts

So it has finally come to pass: mobile contracts went on sale this week from the UK market's latest mobile virtual network operator, iD from Carphone Warehouse. The new MVNO is joining a highly competitive market with numerous brands already available, and will certainly need to offer something pretty unique beyond cheap prices to survive.

Indeed, iD is rising to the challenge, placing its bets on "best value" 4G, flexible contracts and "shockproof" plans. The early indications are that the company is also gearing up to compete head on with network partner Three UK by homing in on Three's core strengths: inclusive roaming, 4G at no extra cost, and unlimited data.

Three UK already places a strong focus on inclusive roaming with the Feel At Home offer, and has traditionally been the only UK operator with an unlimited data message thanks to its "all you can eat" option.

Now, iD is marketing "unlimited data" under its pay monthly plans, without citing any fair use policy. The "DataOnly" plans imply 20 GB could be the limit, but it's not clearly articulated in the online shop. The new MVNO is also offering "free" roaming in 22 countries under the "TakeAway" plans, beating the 18 markets covered by Three UK. Also like Three UK, iD is marketing 4G at no extra cost.

iD has further advantages: as part of the Dixons Carphone group it has access to an extensive retail and online presence throughout the UK. What's more, if Three UK succeeds in its bid to buy and merge with O2 UK, the MVNO will have access to what would be the largest mobile operator by subscribers in the UK.

Despite its differentiated approach and natural advantages, iD still faces an enormous challenge. Like Three, it will be competing against new converged fixed and mobile giants if BT buys EE and Vodafone UK rolls out a home broadband and TV service. More MVNOs are also coming to the market, notably FreedomPop with its promise of free calls, texts and data services from the summer.

CCS Insight further warned that Carphone Warehouse will need to tread carefully to avoid jeopardising existing relationships with its network partners--although the company's approach so far indicates it is prepared to take the risk.

Let battle commence.--Anne

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