TalkTalk signs MVNO deal with Vodafone

TalkTalk has teamed up with Vodafone for a new Mobile Virtual Network Operation (MVNO) deal, which will see the company expand into the mobile industry.

TalkTalk mainly operates in the home phone and broadband sector and lacks the infrastructure and licenses to operate within the mobile sector, but this MVNO deal allows it access to Vodafone’s network.

The financial arrangements of the deal were not disclosed, but we can expect that TalkTalk will be paying some handsome loyalty fees to Vodafone, though this will still be cheaper than forking out for its own network.

Charles Dunstone, CEO of TalkTalk, said: “Over the last 5 years, TalkTalk Group has invested over £1 billion to transform the UK broadband and voice market into one of the most vibrant and good value in the world. Our customers tell us that they expect the same value from their mobile services that they’ve come to expect from their home phone and broadband, so that’s what we intend to provide. We’ve chosen Vodafone as our network partner as they have a proven network and a track record of success with their MVNOs.”

This track record includes an MVNO deal, called TalkMobile, with Carphone Warehouse in 2007, when TalkTalk was still owned by Carphone Warehouse. They went separate ways in April of this year, meaning TalkTalk had lost its mobile market. This may explain why it is keen to regain some of that by signing its own MVNO deal. 

The choice of Vodafone may have been based on its knowledge of how well it worked for Carphone Warehouse, but it could also be seen as an attempt to compete directly with its former parent company and may cause some intense rivalry as a result.

Guy Laurence, CEO of Vodafone UK, said: “Our MVNO partners are an important part of our business. By adding TalkTalk Group, more customers will get to experience our fast and reliable network for all their mobile phone and broadband services.”

TechEye spoke to Debbie Roff at TalkTalk about the deal, asking her why TalkTalk chose Vodafone as a partner and why it was expanding into the mobile industry. She refused to comment, instead sending us a press release we already had. What’s the story!?

We asked if this would put added pressure on Vodafone’s network, if the Carphone Warehouse MVNO deal with Vodafone was an influencing factor in TalkTalk’s decision to team up with Vodafone, and what this would mean in terms of competing with that MVNO, but again we were greeted with silence.

All of these MVNO deals beg the question of just how much Vodafone, or any network for that matter, can hold before we start to see problems occurring with network overload and inferior signal quality. 

Vodafone has signed other MVNO deals with Teleena and Truphone this year, which makes us wonder if actual Vodafone customers will suffer as a result of this, with more people using its network and hogging up the mobile broadband. The effects of overcrowding simply may not be good for anyone involved.

TalkTalk customers can expect to see mobile phone tariffs and mobile broadband options appear over the Autumn period as it puts its MVNO deal into action. We’ll have to wait and see.