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Sainsbury's launches mobile network in partnership with Vodafone

Supermarket chain will target older end of the mobile market with simple deals and Nectar points

Sainsbury’s is set to become the third supermarket to launch its own mobile phone network (after Asda and Tesco), with a newly announced Mobile by Sainsbury's.

The new network is in reality an MVNO (a mobile virtual network operator) that has been created via a partnership with Vodafone. This means that it is the latter who will be providing all the physical equipment for the network (and thus also the signal strength), while Sainsbury’s will simply be re-selling this service.

Whilst Tesco - who entered the market in a similar fashion ten years ago, making a deal to use 02’s infrastructure – aim at the budget end of the market, Sainsbury’s hope to cater for people who do not need the latest handset, but just want simple deals.

According to The Telegraph market analysts Mintel claim that the 45 to 54 demographic is “largely untapped” and that 38% of customers have not upgrade their handset due to price. It is this market that Sainsbury’s will hope to target.

Although there have been no official announcements of tariffs or handsets, ITProPortal are currently reporting that the new network will include the latest iPhone 5, as well as the Samsung Galaxy S4 with 600 minutes, unlimited texts, and 750MB of data for £32 per month.

The news followed another minor shake up in the mobile market as Three announced its simplest, and cheapest, pay-as-you-go contract. The new tariff from the smallest of the UK’s four major mobile providers now has a rate of 3p a minute, 2p a text, and 1p per MB of data.

The company says it is a reaction to the 179 varieties of complex pay-as-you-go deals, some of which have hidden requirements like monthly minimum top-ups, or that only offer value for one element of phone usage.

Elsewhere, browser-makers Mozilla launched their own mobile operating system, Firefox OS, with a €39 handset in Spain. The company hopes to tap into emerging markets in parts of Europe and South America and wrest away market share from iOS and Android by offering low-cost, entry-level smartphones.