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UK Mobile Market Faces Disruption as Octopus and Revolut Enter the Scene

After revolutionising the energy and banking sectors, Octopus and Revolut are now setting their sights on the UK mobile telecommunications market — a move that could reshape an industry long dominated by a handful of players.

Fintech Giants Step into Mobile

Revolut announced plans this week to launch a comprehensive mobile package in both the UK and Germany, adding mobile services to its growing “super app” ecosystem. This includes an eSIM that supports international roaming — a product Revolut claims is its most popular non-banking service.

Meanwhile, Octopus, known for its disruptive presence in the energy sector, is reportedly exploring the launch of a mobile network via its subsidiary Fern Trading. This would represent yet another challenge to the traditional telecoms model.

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Addressing Industry Pain Points

Hadi Nasrallah, head of telecoms at Revolut, stated: “Consumers are suffering from a lack of transparency, hidden fees, poor customer experience, and outdated design. We aim to solve all three issues.”

The companies will join the market as Mobile Virtual Network Operators (MVNOs) — providers that offer mobile services without owning physical network infrastructure. Instead, they lease bandwidth from major networks such as EE, Vodafone, Virgin Media O2, and Three, which are soon expected to consolidate into just three major players.

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The Rise of MVNOs and Competitive Threats

MVNOs are not new — the UK launched the first-ever MVNO, Virgin Mobile, in 1999. But their influence is growing. According to Enders Analysis, MVNOs added 1.6 million users in 2024, while the big four operators lost 180,000 — marking the first net loss in their history.

The success of brands like Tesco Mobile and Sky Mobile, which bundle telecom services with broadband and TV, signals strong consumer demand for bundled offerings from trusted names. Analyst James Robinson of Assembly Research estimates that over 25% of UK consumers may be using MVNOs by 2028, up from 16.5% today.

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A Two-Front Battle for Traditional Operators

MVNOs not only compete for end users but also for wholesale contracts. As capacity grows and major operators look for new revenue streams, they are increasingly open to hosting virtual networks. Karen Egan of Enders highlights that operators are “struggling to find growth elsewhere” and are offering more attractive wholesale deals to MVNOs.

This trend is likely to accelerate once the Vodafone-Three merger finalises. The newly combined entity is expected to have more capacity to host MVNOs, increasing competition among networks to secure deals. Virgin Media O2, for example, is reportedly purchasing extra capacity from Vodafone-Three to attract more virtual network partners.

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Skepticism Amid Optimism

However, not all industry insiders are convinced. James Ratzer of New Street Research argues that the already saturated UK market leaves little room for new entrants. “New brands will intensify competition, but likely only marginally,” he said.

Others question the viability of the “super app” model in Western markets. Rupak Ghose, a former Credit Suisse analyst, pointed out that such apps thrive in China due to a lack of existing platforms — unlike in the West, where dominant players already exist across categories like food delivery and ride-hailing.

Despite this, brands like EE still see value in MVNO partnerships, especially when paired with strong brand recognition and service innovation — traits that both Octopus and Revolut bring to the table.

Exploring the Growth Potential of the Mobile Virtual Network Operator Market

Conclusion

While the extent of disruption remains to be seen, the entry of Octopus and Revolut into the mobile space reflects a broader shift toward customer-centric, tech-driven services. If their success in other industries is any indicator, the UK mobile market may be on the verge of a significant transformation.

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