The most important development in mobile may not be taking place inside the mobile network operators at all. It is happening inside supermarket loyalty apps, banking platforms, membership schemes and retail ecosystems.
Retailers AO and Lidl are launching mobile services, while digital banks Starling, Monzo and Revolut are embedding travel eSIMs into their apps. Together, these moves point to a significant change in telecoms: connectivity is becoming a feature that almost any established consumer brand can sell, bundle or use to strengthen loyalty.
AO has launched a UK mobile proposition built around its membership programme. Lidl is planning to expand its Lidl Connect service across its European markets. Meanwhile, Starling Bank has followed Revolut and Monzo into travel eSIMs, allowing customers to buy overseas mobile data alongside the banking and travel tools they already use.
These are different propositions. AO and Lidl are entering the market as mobile virtual network operators, or MVNOs, offering ongoing domestic mobile services. Starling is embedding a travel-data product rather than attempting to become a conventional operator.
However, all three point in the same direction. Mobile connectivity is being separated from the traditional mobile operator relationship and turned into a modular digital service that can be delivered by the brands customers already use.
For the wider telecoms industry, this raises questions about who owns the customer, controls the interface and captures the value. For telemedia companies, it creates a potentially substantial market for the enablement, billing, identity, messaging, payments and value-added services sitting beneath these new propositions.
From mobile tariff to loyalty mechanism
AO Mobile has launched with a deliberately simple proposition: one SIM-only plan offering 500GB of data, unlimited UK calls and texts, 15GB of EU roaming and 5G connectivity over Vodafone’s network.
The 30-day rolling plan costs £12 a month for members of AO’s subscription programme and £18 for non-members. Customers can select a physical SIM or eSIM and add as many as nine additional SIMs to the account.
That pricing makes the connection with AO membership explicit. The £6 monthly saving provides another reason to pay for and retain the retailer’s £39.99 annual subscription. Mobile therefore becomes more than a standalone revenue stream. It strengthens the perceived value of the wider AO relationship.
“We want to remove complexity and keep mobile simple so that it’s easy for customers to understand,” says AO Founder and CEO John Roberts. “Our pricing is transparent, our contracts are flexible and our prices are fixed. For AO, this feels like the right approach because a mobile phone is so central and critical to everyday life.”
Lidl has still greater ambitions. Under a five-year agreement, 1GLOBAL will become the exclusive mobile connectivity technology partner to Lidl parent Schwarz Group, which is acquiring a 9.9% stake in the telecoms platform.
Lidl intends to operate as an MVNO rather than simply reselling a third-party service. It plans to introduce national connectivity propositions across its markets, with services integrated into the Lidl Plus loyalty app.
The scale is considerable. Lidl has more than 12,000 stores, while Lidl Plus reaches over 100 million customers. It can promote connectivity through an app and physical network that millions of people already use regularly, substantially reducing the customer-acquisition challenge facing a conventional mobile start-up.
As Hamish White, CEO of telecom software provider Mobilise, observes here, Lidl is not starting from a cold base. It already has regular contact with customers, an established value proposition and a digital loyalty relationship into which mobile can be inserted.
That is central to the new generation of retail MVNOs. Mobile is not simply another item to sell. Because customers use it continuously and pay for it repeatedly, connectivity can turn an occasional retail interaction into an everyday relationship.
The difference between having a network and owning the customer
Retail MVNOs are not new, and a recognised name is no guarantee of success. Mobile by Sainsbury’s closed after failing to achieve sufficient scale, illustrating the weakness of a branded tariff that remains disconnected from the rest of the customer experience.
Tesco Mobile offers the more successful model. With more than five million customers, it demonstrates what can happen when mobile combines clear value with large-scale distribution, brand recognition and an existing loyalty ecosystem.
As White argues, mobile cannot be a “side quest”. It needs to support the retailer’s wider relationship with the customer, whether through rewards, membership benefits, delivery services, finance or travel.
That changes the basis on which brands compete. An MVNO does not necessarily need to offer the cheapest data in the market if it can make the customer’s overall relationship with the brand more valuable. Data allowances might become rewards. Mobile discounts might encourage membership renewals. Family SIMs could deepen household-level relationships, while telecom usage produces new opportunities for relevant offers and service interactions.
Host network operators also stand to benefit. Branded MVNOs can put additional traffic onto their networks, improve utilisation and acquire customers without the operator carrying the full cost of marketing, distribution and frontline support.
But there is an important shift in power. The network delivers the coverage, yet the retail or financial brand increasingly controls the application, payment relationship, customer data and moment of sale.
The operator risks becoming less visible even as its infrastructure becomes more widely used.
eSIM removes the physical barrier
The technology accelerating this shift is eSIM. A physical SIM creates operational friction. It must be manufactured, packaged, distributed and inserted into a compatible device. An eSIM can be selected, purchased and activated remotely inside an app, making connectivity look much more like any other digital add-on.
This is particularly powerful for brands that do not want to run a complete mobile operation. They can introduce a specific connectivity product at a relevant point in the customer journey without building shops, stocking SIM cards or asking customers to establish another account with an unfamiliar provider.
Starling Bank’s travel eSIM illustrates the model. Powered by Gigs, it gives Starling customers access to 1GB, 3GB, 5GB and 10GB plans covering more than 130 countries.
Plans last for 30 days, can be purchased before departure and activate when the traveller reaches their destination. Customers can buy further data while overseas and retain access to the Starling app even when their allowance has been exhausted.
That last feature connects telecoms directly to banking utility and security. A traveller who runs out of data can still check a payment, freeze a card, transfer money or purchase another allowance. Connectivity is therefore not an unrelated extra: it completes a travel proposition that already includes fee-free overseas spending, ATM withdrawals, exchange-rate information and spending tools.
“The key piece missing was staying connected overseas,” says Hermann Frank, CEO and Co-Founder of Gigs. “Starling’s eSIM completes the travel toolkit, with users online the moment they hit the tarmac.”
Starling owns the customer relationship and understands the context in which connectivity is required. It can present mobile data when customers are planning a trip, checking exchange rates or beginning to spend overseas, rather than competing for attention in a generic SIM marketplace.
This contextual distribution may ultimately be more important than connectivity pricing alone.
Banks validate travel connectivity – but specialists retain an edge
The arrival of banks also confirms how important overseas connectivity has become to the travel experience.
“The entry of digital banking giants like Monzo, Revolut and now Starling into the travel eSIM space is a strong indicator of how travel connectivity is no longer simply a luxury – it has become essential to the modern travel experience,” says Alfonso Mata, head of strategy at travel eSIM provider Holafly.
“For years, UK travellers have faced a messy patchwork of post-Brexit roaming rules – where staying connected while on holiday can easily cost holidaymakers well over £100 in extra fees. Fintechs have recognised that high roaming costs and confusing daily passes remain a major friction point for travellers, which is why we’re seeing them integrate connectivity directly into their apps. It speaks to the urgent demand for flexible, transparent connectivity.”
Banks have trust, app engagement and customer reach. They also sit close to the moment of travel through card transactions, currency services and spending data. These advantages make them potentially powerful distributors of travel connectivity.
However, the market is unlikely to belong entirely to super-apps. Mata argues that lightweight bundles embedded in banking applications address a different need from specialist products for remote workers, heavy data users and multi-destination travellers.
There is also a service issue. A bank generally does not own the telecommunications infrastructure behind its eSIM. When a connection fails, it may need to pass the problem to an upstream provider.
“Ultimately, the true differentiator in this new economic landscape isn’t the technology itself, but the reliability and peace of mind built around it,” says Mata.
The likely result is segmentation rather than the elimination of specialist providers. Banks, airlines and travel brands can capture customers seeking convenient, occasional connectivity. Dedicated eSIM companies can compete through unlimited plans, broader coverage, network optimisation, specialist support, security tools and other services that extend beyond raw data.
The opportunity beneath the brand
For Telemedia, the largest opportunity may sit behind the consumer-facing names. AO, Lidl and Starling do not want to recreate every component of a telecoms business. They need platforms capable of providing network access, eSIM provisioning, subscriber management, billing, roaming, number porting, regulatory compliance, fraud prevention and customer-service tools.
They must also connect those capabilities with membership programmes, banking applications, loyalty platforms and existing payment systems.
That expands the market for MVNEs, eSIM platforms, wholesale aggregators and connectivity-as-a-service providers. Companies able to provide modular capabilities through APIs will be particularly attractive to international brands that want a common platform while retaining the ability to work with different network operators and regulatory regimes in individual countries.
There are openings across the wider telemedia value chain too. Every branded mobile service needs authentication, customer notifications, consent management, payment collection, fraud monitoring and support communications. It may also offer content, device insurance, cybersecurity, entertainment subscriptions or other value-added services.
RCS, SMS and in-app messaging can support activation, number transfers and customer care. Identity providers can handle onboarding and anti-fraud checks. Payments companies can support subscriptions, top-ups and cross-border purchases. Analytics platforms can help brands understand how connectivity affects loyalty, churn and customer lifetime value.
The winners will be the providers that make telecommunications sufficiently simple for a non-telecom brand to offer it without exposing customers to the complexity underneath.
Connectivity becomes invisible
There are risks. Mobile is fiercely competitive and poor activation, unreliable roaming, billing disputes or weak customer support can damage the brand whose name appears on the service, even when the underlying failure lies elsewhere.
Not every loyalty programme needs a mobile network, and not every retailer has the engagement or differentiation required to sustain one. Wholesale economics remain important, while a familiar logo attached to an undistinguished tariff is unlikely to be enough.
Nevertheless, AO, Lidl and Starling collectively reveal where the market is heading.
Connectivity is becoming an embeddable capability rather than a product available only from a telecom operator. The consumer may increasingly buy mobile service from the supermarket where they shop, the retailer that sold them their handset or the bank they use abroad.
For network operators, that creates wholesale growth but potentially weakens direct ownership of the customer. For specialist eSIM companies, it validates demand while increasing the pressure to differentiate through service, coverage and reliability. For brands, it creates recurring revenue and a powerful new loyalty mechanism.
And for Telemedia providers, it opens a much wider addressable market. The central commercial opportunity is no longer merely to help telecom companies sell more services. It is to provide the infrastructure that allows almost any trusted brand to become, in the eyes of its customers, a mobile provider.
