Monday, September 15, 2008

Post Office ponders MVNO option

The Post Office is considering launching a mobile phone service after the success of its move into the residential broadband market, which has given the company more than 500,000 customers only a year after the launch.

Having just reduced its broadband prices, the Post Office also reckons that it is benefiting from the credit crunch as cash-strapped homeowners look for the best deals in the market.

Telecoms is a crucial area for the Post Office as it looks to increase revenues, and it is roughly on track to hit its target of a million broadband users by 2011, according to Martin Moran, head of telecommunications at the Post Office.

"In a funny sort of way the credit crunch is helping us," said Moran. "We have always wanted to be not the cheapest but certainly among the three cheapest in the market but still have excellent customer service."

The Post Office's broadband and home phone service has been particularly popular among lower income households, as it allows consumers to pay cash at their local branch rather than signing a direct debit. But the worsening economic climate has attracted consumers from higher socio-economic groups.

But the vast majority of the Post Office's broadband users are still new to broadband. More than 80% are using broadband for the first time, while half of those have never used the internet at all. Broadband growth has slowed after it reached about 70% of the UK, as most households with a computer are online. To help get the rest of the country online, the Post Office is considering ways to make it easier for first-time buyers to get a PC - a service could appear next year.

It is also very interested in offering a mobile phone service, using the infrastructure of one of the five existing mobile phone networks. Moran said a mobile phone service was still "in the planning" stage but something could also be rolled out next year.

Who knows, in 12 months time you could be popping to the Post Office to pick up a mobile broadband dongle!

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