Tesco looks for MVNO entrance

Supermarket giant Tesco is planning to enter the Irish mobile phone market, probably with O2 providing the network.

Tesco is reported to have talked to other networks, but the O2 relationship is the logical one. Tesco and O2 have been running Tesco Mobile in the UK as a 50:50 joint-venture MVNO since July 2003, with Tesco handling the marketing and promotion while O2 provides the network infrastructure. The service has around 500,000 customers.

Tesco Mobile offers a range of pay-as-you-go tariffs that emphasise value. Customers can buy phones and SIM cards both from stores and online; Tesco UK has also just opened its first mobile retail store, admittedly within a large supermarket in Slough.

A similar set of services are likely to be rolled out in Ireland this year, perhaps as early as the Spring.

Tesco is Ireland’s biggest supermarket chain, with a 26% market share and revenues of €2bn from 91 stores. That would certainly give it a base from which to pep up a market dominated by Vodafone and O2.

Meteor might be an immediate competitor at the discount end of the market, but more direct opposition could come from Clever Communications –  reported to be be very close to finalising an MVNO with Vodafone. Clever is headed by Niall Norton, a former finance director at O2.

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