A mobile price war may be in the offing following the news that the founder of UK-based budget airline easyJet, Stelios Haji-Ioannou, is preparing to launch a mobile virtual network operator (MVNO) service. According to a number of local media sources, a news conference will be held tomorrow to publicly unveil the new low-cost voice and text service easyMobile, with Stelios looking to steal a march on his major rival Ryanair, another airline preparing to enter the mobile market. easyMobile was originally to be called easyTelecom and looks likely to be just one of many new ventures to emerge from the Stelios stable in the forthcoming months. A number of other ‘easy’ branded start-ups are being prepared for launch, including easyHotel, easyBus, easyPizza and easyCruise.
The entrepreneur first mentioned plans to rollout a mobile service in February, saying that the start-up would slash costs for consumers by buying millions of minutes from network operators and reselling them as cheap voice calls. Whilst details of the service remain scarce, easyMobile promises to offer the same call rates at all times of the day, basing its service around the business model used by Danish MVNO Telmore. Subscribers will sign up on the web and be sent SIM cards in the post to be used with their existing mobile phones; easyMobile will not sell the phone handsets themselves. Sales, customer care and billing will all be done on the internet, following the budget airline route to cutting costs. Telmore’s parent TDC has come on board to handle customer billing and network operations for the new operator.
Telmore now has more than 500,000 users in Denmark, from just 130,000 at mid-2002. The rise of the MVNO has been cited as a major contributing factor in drop in the price of voice calls in Denmark from an average EUR0.17 per minute to EUR0.09 since the start of the year; sending a text message now costs an average EUR0.02, from EUR0.07 at the end of 2003. Analysts believe that the launch of easyMobile could have a similar affect on the UK mobile market.