Phone Family signs MVNO deal with Three Sweden

Phone Family is to start selling mobile services under its own brand after signing a mobile virtual network operator (MVNO) agreement with Three Sweden, as the Stockholm-based mobile phone and broadband services retailer seeks alternative revenue streams following the loss of key network operator partners this year.

The retailer, which also sells various other gadgets and accessories, said it hopes to start selling mobile services under its own brand at the start of 2015. The company said is will be responsible for its own billing services, packaging and line rental, and will be Sweden's first independent MVNO with its own network of stores.

"The biggest challenge virtual operators usually face is the sale and distribution of its services. Our strengths and competitive advantage lies in our established retail chain with 25 stores throughout Sweden, from Trelleborg in the south to Borlänge in the north," said Jon Hjertenstein, CEO of Phone Family.

Recent developments suggest that Phone Family is making every effort to avoid the same fate as UK mobile phone retailer Phones 4U, whose business recently collapsed even though the company had also launched an MVNO called Life Mobile. Phones 4U was forced into liquidation after EE and Vodafone UK cancelled their service agreements, leaving the retailer with no network operators on its books.

As things stand, Three Sweden is the only mobile network operator to still have an agreement with Phone Family. In August, Phone Family said Telia had terminated its agreement with the retailer with effect from the end of September. The operator accounted for 15 per cent of Phone Family's revenue in the first half of 2014. Phone Family also confirmed in its second-quarter results that Tele2 had terminated its contract with effect from the final quarter of 2014.

Reports in Sweden also said that Telenor had stopped selling its mobile services via Phone Family after criticising its marketing tactics.

Apart from its relationship with Three Sweden, Phone Family resells broadband and TV services from Viasat, Com Hem and Net1. However, Com Hem is also understood to be ending its relationship with the dealer as of January 2015.

In August, Phone Family was forced to revise down its 2014 revenue growth estimates from 25 per cent to between 0 per cent and 5 per cent. The profitability target was revised down from 7 per cent to an operating margin of between -1 and 1 per cent. The company said at the time that it had intensified work on the development of its own subscriptions under its own brand.

For more:
- see this article from VA Telekommarknaden (translated by Google Translate)
- see this blog from KNYT (translated by Google Translate)
- see this Phone Family release (in Swedish)
- see the Q2 2014 results statement from Phone Family (in Swedish)

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