UK-based digital bank Monzo has announced its plans to roll out a UK mobile phone service, aiming to join this competitive market.
Currently, Monzo is looking into introducing its digital sim and providing monthly contracts, as detailed by people familiar with the matter cited by the Financial Times. The initiative would further diversify the digital bank’s revenue streams, moving them away from its core banking services. The same sources mention that Monzo confirmed it was in the early stages of developing this proposition.
Fintechs joining the mobile services market
According to Monzo, the decision to release this mobile service follows demand from customers, who mentioned mobile contracts as the main pain points for them. Considering this, the financial institution now wants to explore how it could optimise this service through its solutions and approach.
Monzo comes as the third fintech company to expand its services into the mobile sector, aiming to gain an additional revenue stream. Both Revolut and Klarna have announced their plans to launch mobile phone services in the UK and internationally. Additionally, Octopus is planning a similar offering through a subsidiary, individuals acquainted with the details said.
With more fintech companies joining the market, competition for incumbents like EE, Virgin Media O2, and VodafoneThree might increase. Market analysts mention that the new entrants could have a substantial impact on the UK mobile market, as these companies have a significant user base across the region to cross-sell services to and will launch appealing offers based on price and other terms like roaming charges.
Furthermore, Monzo might enter the market as a mobile virtual network operator, which provides solutions to customers without developing its own core infrastructure. Such operators leverage the networks of large telecoms groups and usually undercut them on price.
Recently, Monzo also announced its decision to shift its investment and pension products to a new infrastructure provider, with plans to complete the migration to Seccl’s platform by September 2025. The initiative was set to enable the embedded investment technology firm to take over custody, wrapper administration, and investment servicing functions for Monzo’s user base.
