Asda Mobile has dropped Vodafone as its MVNO partner and is switching its business to EE.
Sources say the supermarket became frustrated with Vodafone, believing EE will support faster expansion.
The partnership with EE is expected to see Asda Mobile expand beyond PAYG to offer cut price monthly contracts and a wide range of smartphones. It will launch a head on challenge to MVNO rivals Tesco Mobile and Mobile by Sainsbury’s as well as high street retailers Carphone Warehouse and Phones 4u.
The move is part of Asda’s wider plans to carve out a major share of the UK’s mobile market which has also seen it launch a trial of directly managed Asda Phone Shops this year. If the trial is successful, the retailer plans to roll the Phone Shops out across its 500 plus stores, which will significantly boost the MVNO’s reach.
Sources say Asda put the MVNO contract out to tender after increasing dissatisfaction with Vodafone’s services as an MVNO partner.
One source said: ‘Asda jumped to EE from Vodafone after poor service from Vodafone.’ He added that Vodafone was ‘lacking focus or resource in this area which made Asda start looking 12 months ago.’
However others said Vodafone was unhappy at the lack of resources Asda had put into its PAYG MVNO.
‘Asda Mobile has never had anywhere near the MVNO staff that say Tesco has. Vodafone was frustrated by Asda’s lack of focus.’
The news of Asda’s deal with EE closely follows Vodafone’s recently announced joint venture partnership with Sainsbury’s which saw the launch of the Mobile by Sainsbury’s MVNO this summer.
Sources said Vodafone’s joint venture deal with Sainsbury’s was the ‘final straw’ for Asda.
One said: ‘Asda was not at all happy about Vodafone becoming Sainsbury’s MVNO partner, particularly as Asda had wanted to move into contracts but Vodafone had not encouraged that move. The fact that Vodafone is in a joint venture partnership with Sainsbury’s, rather than the plain old MVNO contract it had with Asda also speaks volumes.’
One telecoms source said Vodafone’s deal with Sainsbury’s was a closer fit to its wider strategy to go for quality connections. ‘As a premier brand Sainsbury’s is a much better fit for Vodafone. They obviouslythought it was worth the risk of losing the Asda contract. OK, they lose a few thousand Asda connections but Vodafone is not chasing volume, it is chasing high spending, premium connections.’
The Asda deal marks another feather in EE’s MVNO cap. The operator has launched an aggressive MVNO policy over the past year, making the winning and retaining of large MVNO partners a strategic priority, following its network upgrades and the launch of its 4G services.
One source said: ‘EE would not have gone into this deal if they weren’t sure that Asda has big plans in mobile.’
Vodafone confirmed the split this week. A Vodafone spokeswoman said: ‘After many successful years as an MVNO, we can confirm that the Vodafone/Asda partnership is ending.’
Gerry McQuade, chief marketing officer, non-consumer mobile at EE, said: ‘By choosing the EE network, ASDA Mobile will guarantee its customers access to the UK’s biggest, best and fastest network. Our partnership with ASDA is a great example of how EE can provide integrated solutions that help businesses keep their colleagues and customers better connected, wherever they are.’
Asda retail director Mark Ibbotson, said: ‘EE already provides excellent service to our customers and colleagues by providing free WiFi in store, and through our business to business contract. So this mobile partnership felt like the next logical step.
‘Our decision to take our MVNO business to EE was driven by our ambition to further improve the experience for Asda Mobile customers, by taking advantage of a bigger and faster network, with first class network coverage – and offering even better value.’
Author: Carol Millett