UK MVNO sparks race to the bottom with £6.99 2GB 4G tariff

Charity-conscious MVNO The People’s Operator has launched a cut-price 4G tariff, undercutting its MVNO market rivals in the process.

The SIM-only, 30-day rolling tariff will offer 2GB of 4G data every month, along with unlimited texts and 600 minutes of data. UK MVNO market leaders Virgin Mobile and Tesco Mobile offer similar packages at nearly twice the cost of the TPO’s £6.99 per month package. Its nearest competitor in the SIM-only market, Giff Gaff, offers an almost identical package for £12.

The service has launched on EE’s network, although TPO told Telecoms.com that it has an agreement in place with Three to switch over at some point in the next few months. A specific date remains yet to be confirmed, but it looks as though the penetrative pricing strategy adopted for market entry could be based on the expectation of joining the Hutchison-owned operator in the near future.

Three is the only MNO in the UK market to offer totally unlimited data buckets, but it’s generally accepted that this is traded off with slightly lower network speeds. TPO jumping over to Three in the not-too-distant future may well be the premise behind its ultra-cheap 4G offering. For now, it’s benefitting from the UK’s biggest 4G network on EE.

Ernest Doku, telecoms expert at comparison site Uswitch.com, says such a compelling price point has the potential to refresh and disrupt the mobile industry in the UK, for both MNOs and MVNOs.

“Mobile virtual network operators (MVNOs), which piggyback off the spectrums of the Big Four mobile networks, have upped their game to offer some of most attractive SIM-only deals going,” he said. “TPO isn’t just going for the Big Four’s jugular. It’s also tossed its hat into the ring with its fellow MVNOs – doubling iD Mobile’s data allowance for exactly the same price with this new deal. It’s exciting to see such aggressive competition and the resulting downward effect on mobile pricing.”

One question that TPO’s tariff raises is: if it has been possible to price 4G data so competitively, why haven’t operators been doing it longer? Indeed, such aggressive pricing may see the start of a race to the bottom for MVNOs and MNOs alike, if TPO’s offering starts to get traction.