AO Mobile introducing a new membership model to the UK mobile market
This week AO Mobile went live, a little over a year since the electronics retailer announced it would launch a mobile service.
Member only pricing sits at the core of the offer. Membership is £39.99, unlocking benefits that includes free delivery, extra savings, unpacking and recycling services for retail purchases, and finance deals on SIM free phones every 24 months.
Plus there’s an exclusive ‘one size fits all’ member tariff for £12. It’s a straightforward 30 day SIM only deal with 500GB, unlimited calls and texts. It also includes a reasonable 15GB of roaming with an option to top up with boosters.
The obvious comparison to make is with iD Mobile, which falls under the Curry’s brand. iD has led the way in terms of electronic retail MVNO models, introducing a range of price plans from monthly to SIM only, and device bundles. This leverages its retail strengths and heritage inherited from Carphone Warehouse.
However, what iD has not achieved yet, is a full integration into the Currys shopper base, whereas it’s clear this is very much the intention of AO.
It will be interesting to see how this plays out particularly as both MVNOs are on the Vodafone network. There is no difference in coverage or network service so it will come down to proposition and value.
Will embedded member benefits and simplicity win, or will the more traditional MNO approach of a wide range of tariffs, offers and handsets be preferable? It’s perhaps not something you can split in such a black and white way. Each brand knows its customers and has a proposition to suit. That said, I suspect the cautious approach from AO will need to change to be more bullish and give people a wider range of price plans to choose from.
The trend for retail MVNOs shows no signs of slowing
Of course, AO’s launch is part of an ongoing global trend of retailers launching MVNOs to make loyal customers even stickier. UK examples include Tesco Mobile, Asda Mobile, Superdrug Mobile, Coop Mobile, and further afield I’d point to the German retailer MediaMarkt’s Let’s Go Mobile brand and Bait from Walmart in Mexico.
We’ll see more over the next 12-24 months. Lidl is already well on its way to introducing mobile in 30 markets and I firmly expect more to follow suit in Europe, but also emerging markets where regulators want to open up competition. It all supports the predictions that the segment will grow by 50% from $4.8bn to 7.3bn by 2031.
Is that really possible? Yes. Everywhere you look there are retailers with a large footprint that can use mobile to convert customer footfall into additional value and loyalty. From supermarkets, through technology stores to fashion brands, they all have the ingredients provided they can create a proposition full of unique value and strike wholesale terms to underpin growth.
I’m also sure that sooner or later one of the highstreet banks will realise that they need to address the impact of Lendable, Revolut and the Neo banks. Consumers are open to this type of ‘retail’ offer too and with the right help, brands have it in their gift to capitalise on the opportunity quickly.
But whichever brand is next, one thing is for sure, the UK MVNO environment remains as vibrant as ever. Just the way I like it!
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