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The Post Office has launched its own mobile phone service.

The organisation plays hard on the value for money that its new pre-pay tariffs offer, but in practice the market is so competitive it’s hard to make that stand up.

While the headline prices are cheaper, many rivals – notably Tesco Mobile – offer top-up bonuses, which don’t factor into the comparisons.

No, what Post Office mobile boss Geoffrey Smyth thinks will ensure that there are lots of people buying their SIMs and top-ups from the Post Office is that those people are at the counters anyway. He told The Reg that 11 million customers a year already buy pre-paid top-ups on other networks, so while they are collecting their pension or posting letters they can now get phone credit.

The average top-up is a little over £10; the new Post Office service will offer £5, £7.50, £10, £15 and £20 bundles.

It’s what the mobile industry calls a light touch MVNO, or Mobile Virtual Network Operator. The network is run by EE and all the switching and call routing is handled by EE’s preferred Mobile Virtual Network Enabler (MVNE), the French company Transatel. The Post Office will handle billing and customer service, while numbers come from the EE number range. This reduces lots of the problems relating to number portability, being in-bundle when people on other networks call them, and text message routing.

However, the set-up gives the Post Office a lot less flexibility on things like finding the best wholesale rates for international calls and customising the audio.

The longer-term plans for Post Office mobile are to offer 4G – scheduled for September/October, contracts and triple play. This will be broadband, fixed and mobile telephony.

There is no interest in offering TV for quad-play. Smyth, who used to work for TalkTalk – and is full of praise for his rival – says that it’s too easy to get bill-shock from buying movies with a click.

Along with contracts, the Post Office plans to offer handsets. These will be supplied by wholesaler Brightstar. Handsets will only be sold online, as the company feels that while counter staff will be happy to chat to their regular customers about minutes and tariffs, debating the pros and cons of handsets is too complicated.

The tariffs include:

  • £5 bundle offer: 500MB of data, 250 minutes and 3,000 texts
  • £7.50 bundle offer: 500MB of data, 500 minutes and 3,000 texts
  • £10 bundle offer: 2GB of data, 500 minutes and 3,000 texts
  • £15 bundle offer: 3GB of data, 1,000 minutes and 3000 texts
  • £20 bundle offer: 5GB of data, 1,000 minutes and 3,000 texts

The Post Office has been working on the project for more than two years and claims that the inordinate amount of time this has taken is down to a high level of testing of the processes involved. While anyone can get a SIM card online, it will be available initially in 213 branches in the North West and will roll out across the network in the near future. ®

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