The move could pose a threat to the four, soon to be three, players that dominate the industry in the UK. Revolut and Fern’s offerings will be MVNOs, which serve customers without building their own underlying infrastructure. Instead, MVNOs piggyback on the already existing networks of the industry’s players, including BT-backed EE, Virgin Media 02, and the soon-to-be merged Vodafone and Three. Other well-known providers include Giffgaff and Voxi.
Additionally, VM02, which hosts MVNOs including Tesco, is buying extra network capacity from the merged Vodafone-Three entity, which VM02 believes will be an added attraction to challengers. Meanwhile, EE still sees value in partnering with MVNOs but believes that many customers would still prefer to opt for an established service with a trusted brand, according to one person familiar with the company’s thinking.
The world’s first MVNOs was the UK’s Virgin Mobile in 1999. However, the threat posed by virtual operators to established players increased in recent years, with research from Enders Analysis showing that in 2024, MVNOs had added 1.6 million customers to their networks, while the UK’s four major mobile operators lost 180,000 subscribers. This marks the first year in history they have seen a decline.
Revolut has plans to launch a mobile phone plan in the UK and Germany as part of its superapp, where a variety of products can be cross-sold in addition to core banking services. It currently offers an eSIM that customers can use for overseas roaming. Revolut believes that consumers are facing challenges with traditional network offerings due to a lack of transparency with hidden fees, a poor customer experience, and a design that’s difficult to navigate.
Revolut’s move follows news that Octopus, a multibillion-pound fund that owns the eponymous energy company, is exploring the launch of a new mobile operator through its subsidiary, Fern.
New Street Research highlights the already crowded nature of the UK mobile market, with its representatives believing that new brands will increase competitiveness, but to a limited degree, as the market has several other major players.
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