Monzo is planning to launch a mobile phone offering, mirroring similar moves by challenger financial startups Revolut, Klarna, and N26. The UK challenger bank is planning to launch a digital sim and offer monthly contracts in the UK, according to the Financial Times, which first reported the move and which has been confirmed by Monzo.
A spokesperson for Monzo said: "When we heard from our customers that mobile contracts can be a pain point, we set out to explore how we could do this the Monzo way, and we are in the early stages of developing this idea." Monzo’s move into mobile is in its early stages, so it does not yet have a launch date, sources said.
According to the report, Monzo would not build its own infrastructure but would act as a so-called mobile virtual network operator (MVNO). Instead of the high cost of establishing infrastructure of masts and systems, MVNOs licence parts of other operators’ networks. MVNOs then typically try and offer their customers cheaper prices.
Monzo, which has over 12m customers, will hope to be able to cross-sell its mobile proposition to its customers. It will put Monzo up against the likes of EE and the recently-merged VodafoneThree, as well as new challenger financial operators moving into this area.
Challenger banks like Monzo and its rivals are increasingly looking to branch out into new areas and new markets. Along with its core digital banking services, Monzo, for example, also offers insurance and BNPL services. The digital bank is looking to launch across the EU.
In June this year, Klarna said it was launching a mobile offering, first in the US, followed by the UK, Germany and other markets. Earlier this year, N26 said it was planning to offer mobile phone contracts while Revolut also announced plans to launch mobile plans in the UK and Germany.
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