Tesco has cut a deal to sell operator upgrades to Orange, O2, Vodafone, 3, T-Mobile and Virgin Media customers.
The retail giant has launched an upgrade service for Orange and O2 customers that will extend to Vodafone, 3, T-Mobile and Virgin Media within the next few weeks.
The move is part of Tesco’s aggressive drive into mobile which has seen it open 120 Tesco Phone shops so far, increase its handset range to 36 and launch a major push into the contracts market with the launch of 12 month contract deals across all tariffs.
This latest deal lands a direct hit on Tesco Mobile’s competitors, further diverting footfall away from high street mobile retailers.
Speaking to Mobile, David Taylor, Tesco Telecoms COO, said: ‘The big benefit of this service is the convenience it offers customers who can simply upgrade at their local Tesco store.’
‘We will be doing upgrades for all the leading networks, starting with Orange and O2 this month and then with 3, Vodafone, T-Mobile and Virgin over the next couple of weeks.’
The deal coincides with Tesco Mobile’s launch of a range of 12 month contracts, which Taylor said was triggered by the success of Tesco Mobile’s 12 month iPhone deals.
‘Feedback from customers and the success of our 12 month iPhone contract made us realise there were bigger opportunities,’ he said.
He added that initial sales of the new 12 month contracts ‘are exceeding expectations across all handsets’.
Tesco has ambitious plans to grow in contracts. It aims to have a third of a million contract sales within one year of launching to the contracts market. However, it still has some way to go, with only 100,000 contract customers so far out of a customer base of 2.1 million.
The Club Card effect
Tesco’s Club Card is playing a pivotal role in attracting new customers to Tesco Mobile.
The retailer is offering 1,000 Club Card points for customers signing up to its new 12 month handset contracts. It also offers triple Club Card points on prepay and Sim-only transactions.
Taylor said the Club Card promotions are attracting more customers, particularly in the current economic climate. ‘We find the offers are very appealing to Tesco customers and the focus on value during this recession has brought in a lot of new customers,’ he said.
Taylor said Tesco has ‘15 million very loyal shoppers’ using the Club Card on a regular basis.
Tesco is also developing a range of apps for smartphones including one that will act as a Club Card. The retailer has already developed the app for iPhone users along with a Tesco store locator app. A home shopping app for iPhone users is also in the pipeline.
Taylor said Tesco is planning ‘many more apps, which will be available not only on the iPhone but across a whole range of smartphones’.