LONDON-Tesco, one of the United Kingdom’s major supermarket chains, announced plans to launch its own mobile service in partnership with MmO2.
The supermarket will offer branded mobile services to the consumer market based on MmO2’s network via its stores countrywide. The 50:50 joint venture is expected to begin delivering services later this year, initially in the form of prepaid phones to be rolled out via Tesco stores, including its online site (tesco.com), by the December holidays. Postpaid contracts will be launched through the Web site shortly afterward. The service will also provide alerts of supermarket offers.
Both O2 and Tesco are to invest $13 million into the joint venture during the first two years of operation. The deal will offer MmO2 a new mobile retail business and access to Tesco’s 14 million customers every week, while allowing Tesco to further expand its telecom offering to develop new revenue streams. The supermarket chain has already announced a low-cost fixed-line telecom service in partnership with Cable & Wireless, scheduled for launch later this year.
Virgin Mobile also offers MVNO services in the competitive U.K. market, which also has five licensed second- and third-generation mobile operators.
In related news, Lucent Technologies Inc. won a significant contract to provide MmO2 with UMTS gear, including packet technology and services for voice and data.
Many industry watchers had counted out Lucent as a UMTS contender in Europe, and the announcement reinforces the view that the move to packet technology is forcing operators to re-examine their third-generation contracts, which are mostly memorandums of understanding and letters of intent.
MmO2 also has signed deals with Nokia Corp., Nortel Networks and L.M. Ericsson. The Lucent deal is a three-year commitment valued at $45 million and covers Germany, Ireland and the United Kingdom.
“We selected Lucent because they offered a high level of technological capability and experience, cost-effective solutions and the ability to offer us ongoing support and expertise as we carry out this project,” said Dave Williams, group chief technology offer at MmO2.
