Centrica is today expected to announce that it has struck a deal with Vodafone to launch a mobile phone service in the UK under its One.Tel brand.
The household services company is hoping its cheap rate contract based service, with monthly line rental for under five pounds ($7.50), will attract existing pre paid mobile phone customers who have not paid on a monthly basis because of the high charges.
“We are particularly interested in customers on the borders of pre-paid and post-paid who were put off by very high contract charges but are now quite annoyed that the mobile operators have put their pre-paid rates up,” said Ian El-Mokadem, the managing director of Centrica's telecoms business.
As the mobile network operators try to increase the amount of money they make from their existing subscriber base they have become less interested in lower-usage customers and the pre-paid market, concentrating instead on the business market and people who make a lot of phone calls per month.
As a result further deals are expected to be made between networks and companies seeking to buy capacity on a wholesale basis to run their own branded niche services aimed at the lower-end market. Some of the wireless networks are even considering farming out parts of their pay-as-you-go customer base to reduce costs.
The Centrica service, which will operate under the One.Tel brand, is similar to the link between Virgin Mobile and the UK wireless network of T-Mobile, owned by Deutsche Telekom.
Centrica has 1.2m British customers on One.Tel and British Gas Communications, most of whom pay for their internet access and fixed-line telephone services on a monthly basis.
In addition to selling the mobile to these customers, Centrica hopes to attract families to its service by offering to connect up to five phones on one account at a reduced rate.
The company is also offering a SIM card-only product which will allow customers to make use of their old mobile phones.
"When Dad buys himself a new mobile he can give his daughter the old one, although it might be the other way around as teenagers these days want the more fashionable handsets," said Mr El-Mokadem.