Carphone Warehouse sets sights on Irish mobile market

Carphone Warehouse, which is merging with electronics store Dixons, has forged a mobile virtual network operator (MVNO) arrangement with Hutchison Whampoa using 3's network.

Details of the deal will be announced next week, but the retailer, which already operates an MVNO service in Britain on Vodafone's network, has set its sights on expanding in Ireland using the brand Talkmobile.

This is the second MVNO to come out of Hutchison Whampoa's €850 million (£678.79 million) takeover of O2 Ireland. Hutchison agreed with a diktat from the European Commission last month that the O2-3 business must create two new MVNOs in the Irish market.

UPC took the first MVNO agreement. Carphone Warehouse's agreement with 3 will allow it to use up to 15% of 3's network capacity at a fixed price. On those terms, the retailer, which has about 90 outlets in Ireland, will want to sign up as many customers as possible fast and will be helped by its good ground floor knowledge of the market.

The company's Talkmobile brand, which has around 500,000 customers in Britain and handset deals with Apple, Nokia and Samsung, is targeting customers in the price-conscious end of the contract market.

The new entrant is likely to compete closely with Meteor, Eircom's mobile operator, which works the value end of the market and plans to offer mobile services to its cable broadband and television customers.

Under Brussels' rules, 3 must offer either UPC or Carphone Warehouse an option to acquire some of its digital spectrum, moving them to full network operator. However. both operators seem to prefer the MVNO model.

Dixons Carphone

Carphone Warehouse, originally founded by Charlie Dunstone, is also in £3.8 billion merger talks with electronics store Dixons.

Connected devices will be the key focus for the new business which is a marriage of electrical retailing skills and connectivity knowledge.

The group promises to offer Internet of Things (IoT) products which are appliances such as thermostats and health monitors, controllable by smartphones. This would be a leap forward from current PC store offerings.

Cisco research recently revealed that the IoT market will generate $613 billion in global profits, of which $28.4 billion will come from the UK.

Earlier this month there were rumours that EE was planning to pull out of its relationship with Carphone Warehouse and pondering whether to sell direct to consumers.

This would dent the retailer's claims of being able to offer the best deals, as it currently offers handsets and contracts from EE, O2 and Vodafone.

Carphone Warehouse made sales of about €106 million in Ireland in 2013, but produced a loss of nearly €10 million. The shares edged down on Tuesday by 0.8% to 310p.