Vodafone is tapping a lucrative UK mobile virtual network operator (MVNO) market through a deal with supermarket chain Sainsbury’s.
The operator is entering into a joint venture with the retailer, which plans to launch a branded service in the summer. Sainsbury’s main pitch is offering simpler tariffs than competitors, and tapping its store customers with mobile deals.
Informa Telecoms & Media principal analyst Dario Talmesio says the operator is entering a market that is “hugely profitable for mobile operators,” where margins are at least double the 25% of carrier’s retail operations.
Branded MVNO services are already available in the UK, notably from rival supermarket chain Tesco, and Talmesio says several other big name brands are preparing to offer services in the country as the market outperforms traditional players.
“Informa Telecoms & Media calculates that, in the UK, private-label offerings account for about 14% of the total mobile telephony market, and their subscription counts are growing at a much faster pace than those of branded network providers, such as O2 and Vodafone.”