Monzo to Challenge Tesco and Asda with Branded Mobile Phone Service

Monzo, the digital banking powerhouse, is venturing beyond finance by considering the launch of a Monzo-branded mobile phone service. In talks with leading mobile operators, Monzo aims to offer an innovative package, leveraging its reputation for customer-centric services. This strategic move positions Monzo in direct competition with established mobile virtual network operators such as Tesco Mobile, Asda, Sky, and giffgaff.

The planned service responds to recurring grievances from Monzo’s customers regarding traditional mobile contracts. Monzo’s spokesperson said the bank is committed to transforming industries to deliver superior customer experiences, citing its history of revitalising retail banking through technological innovation and transparency. The mobile venture, though in its infancy, reflects Monzo’s ethos of addressing pain points in everyday consumer spending.

Monzo will not be investing in physical network infrastructure. Instead, the bank intends to purchase wholesale access from one of the UK’s major network providers—BT-owned EE, Virgin Media O2, or Vodafone Three. This model, common among MVNOs, enables Monzo to craft bespoke offerings and competitive price points tailored to its 12 million customers. Tesco Mobile currently leads this segment with approximately five million users.

Oak-eyed competitors are also circling the market. Fintech giants Revolut and Klarna are reportedly developing their own mobile services, while challenger energy supplier Octopus is considering a similar leap, illustrating the growing intersection of technology, finance, and consumer utilities.

Monzo, founded in 2015, has marked remarkable growth, adding 2.4 million new customers in the past year, bringing its total to over 12 million. The bank’s revenues climbed 48 per cent to £1.2 billion, and deposits now exceed £16 billion. Notably, underlying pre-tax profits increased eightfold, reaching £114 million. Strategic tie-ups have already been successful within its core business, including a BlackRock partnership for exchange-traded funds and insurance offerings with Chubb and Zurich.

Customer interaction is almost entirely digital, with the majority accessing their accounts via mobile devices. This deep integration positions Monzo to understand where mobile industry friction lies and shape its offering as a genuine challenger. Despite a recent £21 million fine for legacy anti-money laundering weaknesses, Monzo insists these issues are consigned to the past, maintaining strong customer trust and momentum as it eyes new horizons.