Everything Everywhere has signed a deal with China Telecom (Europe) to launch an MVNO on its network.
The operator will launch during the first quarter of this year and will target Chinese residents and businesses in the UK, as well as tourists and students. The partnership is the first time a Chinese telecom operator has launched MVNO services outside of its home country. It was secured through Everything Everywhere's mobile virtual network aggregator Transatel.
China Telecom (Europe) MD Yan Ou said: 'We are keen to launch the service in the UK as soon as possible as there is a real gap in the market for the provision of tailored mobile services and competitive tariffs aimed at the growing Chinese population in the UK.'
Everything Everywhere VP of wholesale and M2M Marc Overton said: 'We’re delighted that Everything Everywhere has been selected by China Telecom (Europe) as its MVNO partner in the UK.'
The deal takes Everything Everywhere's number of MVNO partnerships to 24.
Steven Hartley, Ovum's telecom strategy practice leader, said the deal was 'notable' for China Telecom's international expansion. However, he added the impact of the deal in the UK was 'likely to be muted'.
He said: 'The company’s main selling point is likely be cheap calls home. However, the likes of Lyca Mobile and Lebara already offer this. These rivals are also able to sell to a broader audience wanting to call other countries aside from China. Data from the office of National Statistics published in May 2011 estimates just 0.82% of the population in England and Wales are of Chinese decent and addressable by this deal.
'Finally, China Telecom is the smallest of the three Chinese mobile operators, with just 12% domestic market share. Therefore, the brand will resonate less than the likes of China Mobile and China Unicom, even more so on the other side of the world.'
However, Cesar Bachelet, senior analyst at Analysys Mason, said China Telecom could fare well from the deal. He said before China Telecom's forthcoming entry, there is no specifically designed proposition for the Chinese in the UK. He added the company is a 'well-known and trusted brand within the community'.
Bachelet said: 'So can we expect more to come? Although the road to becoming an MVNO has been littered with notable failures, including Disney Mobile and ESPN Mobile, the concept of the MVNO that targets ethnic communities has had some success. So far, operators based in Asia have generally been slow to capitalise on MVNO opportunities abroad. However, we believe that it is only a matter of time before operators from various Asian countries target their compatriots abroad.