Carphone and Three join forces in MVNO

Carphone and Three join forces in MVNO

Carphone Warehouse is closing a deal with Three to launch an MVNO in the UK by the end of this year.
News of the UK MVNO closely follows the announcement of a similar venture between Carphone Warehouse and Three in Ireland, signalling the retailer’s renewed assault on the MVNO market.

The deal brings major benefits to both parties. Carphone is expected to use the MVNO to grab a major slice of the prepaid 4G market with aggressively priced deals, whilst Three will gain a signi?cant part of the wholesale market and renew its trading relationship with the retailer, after pulling out of Carphone’s stores last year.

Carphone told Mobile it will roll out the MVNO across its retail estate of over 790 stores as well as across its online businesses. The retailer’s impending merger with electronics giant Dixons Retail could also open up major opportunities for the MVNO partnership across Dixons’ 450-plus portfolio of Currys-PC World megastores.
The MVNO, which has yet to be named, will not replace Carphone’s existing MVNO with Vodafone, Talk Mobile, but will run in parallel with it, Carphone said.

A Carphone spokeswoman told Mobile: ‘We are in conversations with Three and expect to launch a second MVNO towards the end of this year or into the early part of next year – we are in the process of signing the deal.’ She added: ‘The MVNO launch is in response to signi?cant opportunities we have identi? ed to address customer demand in a speci? c part of the market.’ The spokeswoman said data from Carphone’s Pin Point programme had identi?ed speci?c opportunities for growth in the market, which the MVNO will target.

Carphone said the MVNO deal did not signify that Three will renew its retail trading relationship with Carphone stores, which was terminated in November last year.

‘At the time we said that we had a good relationship with Three and this is a testament to that,’ she added.

A Three spokesman said: ‘We can con? rm we are in talks with Carphone Warehouse about wholesale opportunities.’Neil Mawston, director of Strategy Analytics said the deal could be a double edged sword for both players: ‘Carphone will struggle to establish itself against established players but there is still space in the prepaid

LTE sector, particularly with LTE Advanced due in 2015. We could see a 4G price war emerge.
He added: ‘Three is obviously on a roll right now. However, whilst it may bene?t from selling airtime without having to return to Carphone Warehouse stores it may not bene? t from directly competing with Carphone in the 4G arena.

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