Monday, 20 April 2009

Tesco plans to expand in-store ‘phone shops’ – UK

Tesco Mobile, a joint venture between Tesco and O2, is planning to double the number of in store phone shops it has throughout the chain. Tesco, the biggest supermarket in the UK, currently has 50 in store shops in the larger Tesco Extra branches, a number which it hopes to increase to 100 by the end of March 2010. Looking long term Tesco aims to have all 210 Tesco Extra stores equipped with in store mobile shops by 2012 or 2013.

Tesco’s MVNO, using the network capacity of O2, has approximately 13% market share in the UK’s prepay market. According to data from the Mobile World, Tesco had nearly two million mobile subscribers at the end of 2008, representing approximately 10% of O2’s total customers in the UK.

Tesco Mobile, who entered the mobile market in September 2003, views this period of in store expansion as part of its general strategy of grabbing a more significant mobile market share. Lance Batchelor, head of Tesco Telecoms, identified rivals 3 and fellow MVNO Virgin Mobile as being within their sights saying: “If we overtook them that would make us the fifth-largest in the market. That starts to feel like an appropriate market share.”

In an interview with The Times newspaper Batchelor said: “Consumers are very often confused by offers put in front of them. Some of the tactics are reminiscent of the used-car industry, they are very aggressive.”

He added that Tesco was running head-to-head with Argos in the prepay market, while a little behind Charles Dunstone’s Carphone. Tesco has also initiated its move into contract phones with a pay-monthly service.