Tesco to go mobile with new service

TESCO and mobile group O2 said yesterday their Irish units would launch a 50:50 joint venture next year to sell Tesco-branded mobile services in Ireland.

The two groups said the joint venture, called Tesco Mobile, would launch next summer, becoming the fifth mobile operator in an already saturated Irish mobile market.

Ireland’s mobile market is ripe for the entry of new operators as it has the highest revenues per user anywhere in Europe. O2 last month reported an average revenue per user (ARPU) figure of €545 a year at its Irish business, compared with €299 in Germany and £272 (€405.47) in Britain.

Tesco Mobile will be Ireland’s first mobile virtual network operator (MVNO) — operators that don’t own their own networks and instead rent capacity on others’ networks.

The company will use O2’s network infrastructure in Ireland and Tesco’s distribution network of 82 stores.

O2, owned by Spanish telecoms group Telefonica, already has a similar joint venture with Tesco in Britain — which has over a million customers.

Tesco Mobile will initially sell Tesco-branded pre-paid mobile services at launch. A pay-monthly service will be offered later.

The two groups did not say how many customers the new venture hoped to sign up, but the service is expected to target cost-conscious Tesco family shoppers who need a cut-price service without fancy handsets.

“The launch of Tesco mobile next year will bring new competition to the market and enable us to provide an excellent quality, value for money product for customers throughout the country,” Tony Keohane, chief executive of Tesco Ireland, said in a statement.