Carphone Warehouse to offer Irish mobile network

Carphone Warehouse (CPW) will become the next mobile operator in Ireland.

The retailer has finalised an agreement with Hutchison Whampoa to offer services using 3's network, in a mobile virtual network operator (MVNO) arrangement. The deal is expected to be officially announced next week.

CPW, which already operates an MVNO service in Britain on Vodafone’s network using the brand Talkmobile, declined to comment yesterday.

It is understood from several industry sources that the company will operate the second MVNO to arise from Hutchison Whampoa’s €850 million takeover of O2.

Competition remedies

Under competition remedies agreed between Hutchison and the European Commission last month, the combined O2-3 business must facilitate two new MVNOs in the Irish market. UPC last month announced the first MVNO agreement with 3, days after the O2 merger gained competition clearance.

CPW’s agreement with 3 will allow it to use up to 15 per cent of 3’s network capacity at a fixed price. This incentivises CPW, which has about 90 retail stores in Ireland, to sign up as many customers as possible to defray the fixed cost.

Under the competition remedies agreed with Brussels, 3 must offer at least one of UPC and CPW an option to acquire some of its digital spectrum, essentially migrating one of them from an MVNO to a full network operator. This option is seen as unlikely to be taken up, however, as neither UPC nor CPW own their mobile networks in any other country, preferring MVNOs.

CPW’s Talkmobile brand has signed up about 500,000 customers in Britain since its launch in 2007, according to its website. It includes customers from CPW’s previous British MVNO, Fresh Mobile.

Talkmobile offers both prepay and postpay mobile services. It is heavily focused on expanding in the postpay segment, aggressively targeting customers in the price-conscious, lower-spending end of the contract market.

It has handset deals with Apple, Nokia and Samsung, and is one of the largest distributors of Samsung’s Galaxy smartphone in Britain.

Meteor competitor

The new entrant is likely to compete closely with Meteor, Eircom's mobile operator, which has been traditionally associated with the value end of the market. It is also likely to take customers from Tesco Mobile, Vodafone and 3. It will not go directly toe-to-toe with UPC, which next year will offer mobile services to its cable broadband and television customers.

CPW’s extensive Irish retail network, as well as its first-hand knowledge of its competitor’s customers from dealing with them in its stores, gives it the opportunity to quickly assemble critical mass.

CPW had sales of about €106 million in Ireland in 2013, according to its accounts, making a loss of close to €10 million.

The company, which was founded by billionaire Charles Dunstone and is listed on the London stock exchange, is in £3.6 billion (€4.5 billion) merger talks with electronics retailer Dixons. It also operates several retail concessions in Ireland with Australian retailer Harvey Norman.