There are reports this week in the national UK papers that phone retailer Carphone Warehouse has cut a deal for a fully fledged MVNO with Vodafone Group, the largest international mobile operator.
While most coverage focused on the previously poor relationships between the two, with Vodafone deliberately snubbing Carphone Warehouse in recent years operating exclusively with other retailers when offering its contracts, what we find interesting is the inexorable way that this company is moving towards a quadruple play, having started life as a simple independent shopping group.
Carphone already has revenues approaching $8 billion, has 2,200 retail stores, and has built its own UK fiber backbone network and installed DSLAMS at 2,212 UK telephone exchanges. On the back of that it has 2.5 million broadband customers, roughly half and half unbundled and wholesaled. Now it has its own brand mobile service, called Talkmobile, renting minutes and SMS facilities from Vodafone. That only leaves it the introduction of a IPTV multicast to complete the quadruple play, and it would automatically become a real challenge for BT, Virgin Media and BSkyB, a challenge that has arrived almost out of nowhere.
The aim behind the Carphone Warehouse mobile service is to offer very low cost, around $24 a month, limited feature, brief contracts that will capture users who mostly use pre-paid mobile. The company believes there are 4.5 million pre-pay customers in the UK who regularly spend more than this topping up on pre-pay.