China Telecom Europe inked a deal with Everything Everywhere (EE) to launch an MVNO service in the UK aimed at Chinese residents and tourists. The Chinese company is also expected to use the agreement as the base to launch MVNO services in other European countries, including France and Germany, later this year.
China Telecom Europe's Yan Ou
Yan Ou, managing director of China Telecom Europe told the Financial Times: "Entering the UK mobile market is a strategic move. We are keen to launch the service in the UK as soon as possible as there is a real gap in the market for the provision of tailored mobile services and competitive tariffs aimed at the growing Chinese population in the UK."
China Telecom said it will be targeting the 2 million Chinese living in Europe--with over 25 per cent of these being resident in the UK-- with Chinese language services, as well as international calls to and from the UK and China.
This move is the first by a Chinese operator to establish an MVNO service outside China and is being viewed as a possible sign that the company will want to buy or build its own mobile network once the China Telecom brand becomes more established. Commenting on the deal, Steven Hartley, from Ovum's telecom strategy, said in a statement: "The deal is notable for China Telecom's expansion outside of China and as an attempt for it to do something different to its rivals. However, the impact in the UK is likely to be muted.
"The company's main selling point is likely be cheap calls home. However, the likes of Lyca Mobile and Lebara already offer this," he added. "These rivals are also able to sell to a broader audience wanting to call other countries aside from China."
China Telecom is also looking to strike a similar deal with an operator in the United States to offer mobile services to Chinese residents. The company already has an agreement with AT&T to use its network for corporate customers.
China Telecom Europe's UK MVNO service will be managed by Transatel, EE's mobile virtual network aggregator partner.
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