UK-based digital bank Monzo has announced its intention to launch a mobile phone service in the UK, seeking to enter a competitive market.

Monzo’s Mobile Service Plans

Currently, Monzo is exploring the introduction of a digital SIM and monthly contracts as reported by sources cited by The Financial Times. This move aims to diversify Monzo’s revenue streams beyond its core banking services.

Fintechs in the Mobile Market

The decision for Monzo to enter the mobile service market is driven by customer demand, which highlights mobile contracts as a key area needing improvement. This follows similar moves by other fintech companies like Revolut and Klarna, both of which have announced plans to offer mobile phone services in the UK and internationally.

Octopus is also planning a similar entry through a subsidiary, according to industry insiders. As more digital banks venture into this space, competition for established telecom operators such as EE, Virgin Media O2, VodafoneThree is expected to intensify. Analysts predict that these new entrants could significantly impact the UK mobile market given their substantial customer bases and competitive pricing strategies.

Monzo plans to operate as a mobile virtual network operator (MVNO), leveraging existing infrastructure from larger telecom companies to offer lower-cost services.