UK Post Office eyes mobile phone venture

Twenty years after it was split from British Telecommunications, the Post Office is considering a mobile phone business as part of its re-entry into telecoms.

Consignia, the state-owned group that runs the Royal Mail, is partnering Sweden’s pan-European telecoms operator, Tele2, to launch a fixed-line service next week that will use Post Office outlets and branding.

It is understood both parties see a mobile phone service as a logical next step if that operation is successful.

The move represents an effort by Consignia to expand its revenue base, which has been hit by the spread of e-mail and private postal companies.

The partnership will allow Tele2 to enter the UK market with a well-known brand. The Swedish company, which leases other operators’ network infrastructure, has 12m customers across Europe and has built mobile phones businesses from its fixed-line operations elsewhere. “It’s our aspiration to (offer) mobile in all the places we offer fixed telephony,” said Peter Scrope of Tele2.

The pre-pay domestic fixed-line service to be launched next week will use networks leased from BT and Kingston Communications. It is believed Tele2 is in talks with UK mobile operators over the leasing of wireless networks. In the Netherlands, Tele2 leases a mobile network from BT’s Telfort subsidiary.

Last month, the Post Office launched pre-pay cards with which customers can dial a prefix and gain access to Tele2’s leased networks in the UK. Next week, a fixed-line business will provide customers with pre-programmed router boxes or digital cordless phones to encourage greater customer loyalty than pre-pay cards.

Consignia said customers could register for the service at Post Office branches, by phone or internet.

David Cromwell, the Post Office’s commercial partnerships director, said Tele2 would run the telecoms side of the business. The Post Office would provide a recognisable brand and act as a retail distribution channel.

He said the Post Office sold 1m travel insurance policies a year, but was not an insurance company: “We are a channel by which telecoms services can be accessed, but the telecoms infrastructure is provided by our partner.”

Page 28; Edition London Ed2; Section COMPANIES & FINANCE UK

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