Retail chains turn to mobile service provision

High Street mobile phone retailers are increasingly looking to move into the MVNO (Mobile Virtual Network Operator) business according to a new analysis from Strand Consult. Over the last 10 years a number of retail chains have become mobile providers and many more are apparently considering going down this route. The retail sector has for many years been a significant distribution channel for mobile operators. Mainly used as ‘box movers' the retailers have used the mobile operator's handset subsidies to attract customers to their stores. This situation is changing however, as the technology becomes more complex mobile operators are focusing on specialist stores as their sales channels.

Strand claims there are many reasons why retail chains would find it attractive to enter the mobile market as MVNOs. The move represents the optimal use of distribution power, margins on ordinary mobile products sold in retail stores are declining whereas margins on selling subscriptions are much higher and retailers need to compete with other store chains which have already made the move.

The Danish consultancy has identified more than 20 retailers-turned-MVNOs, ranging from 7-Eleven, with its Vodafone-owned-and-hosted ‘Speak-up' service in Australia, to Tesco with its O2-hosted ‘Tesco Mobile' service in the UK .

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Related stories:
Furniture retailer IKEA becomes an MVNO
Mark Lowenstein: The Emergence of MVNO 2.0

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