Woolworths to launch mobile phone service

Supermarket and retail giant Woolworths is finalising a service that will see it launch into the mobile phone sector

Supermarket and retail giant Woolworths is finalising a service that will see it launch into the mobile phone sector.

The new project will give the company entry into operating a mobile virtual network, whereby Woolworths would not own mobile phone infrastructure but would instead buy capacity on other carriers’ infrastructure. This is similar to the venture between Crazy John’s and Vodafone.

Woolworths will market the new scheme as part of the Woolworths-Safeway brand, and will offer mobile phones and pre-paid vouchers. The Australian reports Optus will be the likely network provider.

But the managing director and principal analyst at telecommunications research firm Telsyte, Warren Chaisatien, says the move is more an effort to expand Woolworth’s brand recognition than grow its profits.

“Primarily, MVNOs (mobile virtual network operators) are usually attractive to certain demographics, and if they are positioned carefully it would be appealing to demographics like school kids… they’re a strong brand when it comes to the consumer in general.

“I would say that it can be a good move, but I’m not so sure it’ll be a brilliant move for them because overall the market is competitive already. It might be a little bit difficult to break into the market segment. Nonetheless, I can see the MVNO market share is still very small… around 5%, so there’s room to manoeuvre around.”

The deal has allegedly been in the works for the past year, so the service may be ready in time for the Christmas season.

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