Vodafone And Sainsbury’s Pull Plug On MVNO Joint-Venture

Sainsbury’s mobile virtual network operator (MVNO) joint-venture with Vodafone will be shut down at the start of next year following a disagreement about the future direction of the service.

Mobile by Sainsbury’s (MBS) launched in 2013 with the intent of offering cheap mobile tariffs, customer rewards and Nectar points as part of the retailer’s plans to branch out into other services beyond groceries like banking and energy.

But the experiment of combining Vodafone’s technical expertise with the Sainsbury’s brand, customer insight and retail presence is now at an end.

TechWeekEurope understands Sainsbury’s is believed to be disappointed by the failure to secure an agreement, having been satisfied by the MVNO’s performance with consumers, but Vodafone did not think the project was viable.

Mobile by Sainsbury’s

“Our priority now is to help our customers and make sure they are inconvenienced as little as possible,” a spokesperson for the supermarket said. “We will continue to sell mobile phones and accessories in our 38 in-store phone shops and to sell handsets in over 300 of our stores.”

Pay as you go customers will be able to buy credit until November 14 and must use all of it before January 16 – the date after the service will cease to operate.

Pay monthly customers won’t have to do anything – except find a new operator of course. Sainsbury’s initial focus is on helping customers deal with the sudden closure but it could return to the mobile space in the future.

“Given the performance and prospects of the MBS business in the prevailing market conditions, the investment required to sustain the joint venture is not viable for Vodafone,” a Vodafone spokesperson told TechWeekEurope. “Mobile by Sainsbury’s priority now is to help its customers and make sure they are inconvenienced as little as possible.”

Vodafone is adamant it has no plans to exit the UK MVNO market, despite the split with Sainsbury’s and the decision by TalkTalk to switch its service to O2. Indeed, it was TalkTalk that claimed Vodafone’s departure from the scene was imminent in its submission to the Competition and Markets Authority’s (CMA) investigation into BT’s £12.5 billion acquisition of EE.

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