Previous Story: Satellite failure hits US broadband services
Next Story: JFK reloaded game causes controversy

Low-cost easyMobile service hits UK, eyes Europe
By Scarlet Pruitt

Danish telecom company TDC A/S is teaming up with T-Mobile UK Ltd. to launch a low-price, no-frills mobile service in the U.K. under the easyMobile brand.

TDC said Monday that, beginning in March 2005, it will offer a Web-based telephony service, in which customers buy a prepaid SIM (Subscriber Identity Module) card for their existing handheld and manage their account online. TDC experienced some success with a similar service in Denmark dubbed Telmore, which claimed 10 percent of the market within four years of launching.

The company is now planning to dial into other markets by leveraging the easyMobile brand, which it has licensed from easyGroup (U.K.) Ltd., to use in up to 12 European countries. First it's testing the U.K. market, however, where it is using the network infrastructure of T-Mobile. Telmore founder Frank Rasmussen will serve as chief executive officer of the new business.

The easyMobile service offers voice and SMS (Short Messaging Service) capabilities and is available for all mobile customers who use second-generation handsets, a spokesman for TDC said.

Prices are yet to be announced but are expected to be lower than those offered by the U.K.'s major mobile providers.

To give a comparison of the possible price difference, the TDC spokesman said that Telmore charges 0.80 krone (US$0.14) per minute for voice, compared to the average mobile voice charge in Denmark of 1.10 krone per minute.

The easyMobile service could lead to an overall reduction in U.K. mobile tariffs, according to a report by analysts at Ovum Ltd. The offering is likely to put pressure on other mobile operators, the analysts said, and won't win many industry friends for T-Mobile.

T-Mobile, which is the U.K. wireless arm of German telephone giant Deutsche Telekom AG, already has a wholesale deal with Virgin Mobile in the country, but easyMobile will give it added revenue without taxing its network, the analysts said.

Like Telmore, the easyMobile concept is based around lean operations, a small marketing budget and no physical store locations.

Although the service is basic, TDC is hoping that customers appreciate the cost savings. In Denmark, Telmore customers called to complain that the company was wasting money when it ran a TV ad for the service, the spokesman said.

Now it remains to be seen if U.K. customers are as thrifty.

Posted November 29, 2004 04:28 PM |