Internet and telecoms provider TalkTalk has confirmed that they’re in “advanced discussions” with a number of potential partners about the possibility of scaling back their existing Mobile Virtual Network Operator (MVNO) arrangement in order to focus on fixed line broadband.
The ISP first launched their own mobile service via an MVNO agreement with Vodafone in 2010, which lasted for a few years until they alleged that Vodafone were “withdrawing entirely from the MVNO market” and had “terminated TalkTalk’s MVNO agreement without warning” (here). Vodafone denied this and said that the decision to terminate the TalkTalk MVNO agreement “was not made” by them.
Instead the ISP was forced to sign a new MVNO deal with O2 in 2015 (here) and at the time they said this was a “major step forward in our long term strategy to build a small cell and Fibre-To-The-Premise (FTTP) network. Coupled with our own in-home 4G spectrum.”
Unfortunately TalkTalk is known to have faced multiple challenges in attempting to migrate customers on to the new O2 platform. On top of that they’ve also recently shelved their long-running plan to build a femtocell style 4G network via home broadband routers (this is understood to have cost them about £49m).
Today the FT (paywall) reports that TalkTalk, which has recently been attempting to re-adjust its focus back towards providing value broadband and phone packages, have “decided not to pursue an inside-out mobile network strategy” and may instead consider merely reselling mobile tariffs / SIM cards from another operator (e.g. Vodafone, O2 or perhaps even Virgin Media) alongside their other services.
A TalkTalk Spokesperson said:
“We are in advanced discussions with a number of potential partners, including O2, to agree a low touch, retail arrangement that will enable us to continue to offer a compelling mobile service to all our broadband customers.”
At present it’s not known whether such a move would affect the whole of TalkTalk’s existing Mobile base or merely part of it (around 12% of their subscribers are quad-play and removing mobile from that could do a lot of damage). Certainly the current MVNO market is highly competitive and as a result it’s becoming a lot more difficult for fixed line providers to make a viable model.
Not so long ago convergence through quad-play provision (broadband, fixed line phone, TV and mobile) was considered to be of almost vital importance for the long-term survivability of the largest providers, although since then Vodafone has dropped their plans for Pay TV service and now TalkTalk seem to be scaling back on their Mobile ambitions.
Today consumers have a lot more choice and some are also growing tired of frequent price rises. Suffice to say that the old idea of locking customers in via long contracts on quad-play deals might be starting to show some strain. In the future this may be further impacted as more ISPs begin offering standalone broadband without a phone (voice) service.
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