The Post Office is in talks with network operators about rolling out an MVNO via its 11,500 branches and website by the end of next year.
The plans are at an early stage, with the Post Office asking interested parties to outline the type of MVNO it could set up and to identify cross-selling opportunities an MVNO could create.
One industry source said: ‘The Post Office has sent out a Request for Information to interested parties to help it decide what form the MVNO should take. A Request for Proposals will probably be issued later this autumn. The MVNO could be up and running within the year.’
The move is part of the Post Office’s £1.3bn modernisation programme, launched last year, which aims to offer customers a wider range of products and services via its retail estate and on the Post Office website.
As part of the modernisation programme the Post Office is refurbishing its branches as well as installing Europe’s largest NFC payment network, with 30,000 payment terminals installed in branches across the UK.
The UK Post Office is following a tried and tested route with MVNOs already operating in national post offices in Brazil, Portugal, France and Ireland.
Analysts said a Post Office MVNO would lay down a challenge to MVNO rivals Tesco Mobile and Virgin Mobile but would not eat into the four largest operators market share in any significant way.
Strategy Analytics director Neil Mawston said: ‘The Post Office is a trusted brand with a ready-made distribution network, so with the right network deal it is ideally placed to launch an MVNO. It would most probably attract the older and less affluent segment of the market, hitting the likes of Virgin, T-Mobile and Tesco Mobile’s customer base.’ He added: ‘I suspect it will go for the Sim-only market or offer lower cost prepay phones and would, like other MVNOs, probably take no more than a single digit market share.’
Mawston said the move may be part of a multi-screen strategy that could see the Post Office expand its broadband offering to add mobile and eventually internet TV services: ‘This could also tie into its banking services, making the Post Office more a utility provider than a postal service.’
Shaun Collins, MD of CCS Insight, said the expected launch of a Post Office MVNO reflected a shift in the market.He said: ‘The MVNO market is one of the most vibrant of the telecoms market. I suspect we will increasingly see more and more large household brands like the Post Office consider entry into the MVNO market and the related services that offers.’