easyMobile’s entry as an MVNO into the UK market has marked a flurry of price cutting and cutting comment among rivals.
Carphone Warehouse’s Fresh, their pre paid mobile service, has reduced costs further, following an initial cut last week. They’re now operating a 5p rate for all UK calls to any mobile or landline at any time and 1.7p for all texts.
While voice calls and data charges especially are arguably ludicrously over-priced – as an example, I noted that using Virgin Radio’s new service would cost $10,000 an hour – these prices can’t really be maintained. It’s not the cost of the data transmission, which has a negligible variable cost. It’s the cost of the carrier’s interconnection charges that makes this both loss making and unsustainable.
How long now before someone breaks ranks and looks to an “all you can eat plan”?
easyMobile need to do something more radical than chop prices to levels that can be both undercut and are unprofitable. While Stelios may be a media magnet, he’s yet to have any notable success outside of easyJet despite a plethora of other high profile start ups.
While success can be elusive when you’re trying to radically change any industry, you’d have thought with his money and access to talent that one or more would have made some bigger waves by now.
It’s also looking as if he’s subtly withdrawing from the orange logo battle with Orange, who are talking him to court. Their website is starting to turn blue.
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