Dixons Carphone to launch mobile services in the UK

Dixons Carphone, the electrical retailer, is to launch mobile services in the UK that will also offer internet connectivity to the “smart” home appliances sold in its stores.

Under an agreement to use the telecoms network owned by Hutchison Whampoa’s Three, the retailer will sell branded mobile tariffs that will allow customers to change the terms of their use of minutes and data more easily.

Dixons Carphone will also offer mobile connections to customers buying connected devices such as laptops, tablets and home appliances. A reason given for the merger of Dixons with Carphone Warehouse last year was the opportunity to serve the entire internet of things market of connected devices.

“We will have something different from what is available elsewhere in the market with a more personalised service for the mobile customer that will let them tailor their price, minutes and data to their changing needs,” said Graham Stapleton, who runs the Carphone Warehouse operations in the wider retail business.

Mr Stapleton said the group had been working on the launch for nine months and had created a software platform to support services. “We have been working with Dixons about how to serve customers buying connected products such as TVs, laptops and desktop computers,” he said.

The mobile service, which will be launched in the summer, has yet to be given a brand name. Dixons Carphone also sells mobile contracts for the big network operators such as EE — which last week extended its deal — Vodafone and O2.

Carphone previously had a branded reseller deal with Vodafone that had about 700,000 customers under the Talk brand, but this will not be supported through Dixons Carphone stores in future.

The deal has been struck as O2 and Three are locked in exclusive talks to merge their businesses in the UK. If combined the two groups would own one of the largest portfolios of spectrum — which is used to carry mobile calls — as well as the largest mast network. This means that the combined group would have the capacity to add other branded services to its network under wholesale agreements.

The deal with Three is the second big agreement in a week to bring a competitor to the mobile market following the decision by Sky to finally offer its own mobile services using O2 networks.

The launch of high-profile branded mobile offers from so-called “mobile virtual network operators” such as Sky and Dixons Carphone is seen by analysts as a means of strengthening the argument to regulators from O2 and Three that their merger will not undermine competition in the UK.

Analysts point to the existence of a healthy market for alternative branded providers such as Virgin Media, TalkTalk and Tesco Mobile.

There could also be other brands set up to take advantage of any requirement by the regulator to open up the combined networks to create competition. Similar mergers in Germany and Ireland have been allowed, but with the caveat that they must set aside capacity on networks for rivals to use at low wholesale prices.