Tesco Mobile sees losses rise as customer numbers grow

Losses at Tesco Mobile, the country's fourth largest operator, rose by a third last year despite the company's customer base increasing by more than 10 per cent.

Newly-filed accounts for the mobile virtual network operator (MVNO), which is a joint venture between the supermarket chain and Three Ireland, show operating losses jumped from €112,000 to €153,000 in 2015.

Full-year revenues increased 39 per cent from €41 million to €57 million. Sales costs were up €9 million, from €24 million to €33 million.

Tesco Mobile, which had more than 300,000 customers at the end of 2014, gained close to 50,000 additional subscribers last year. It attributed the rise in market share to its competitive price plans, which include offering Tesco clubcard points to customers who top up or pay their bills.

The operator, which uses Three’s network, provides 3G and 2G services and has 99.6 per cent population coverage.

Tesco Mobile, which operates 21 dedicated mobile phone stores across Ireland, did not provide a breakdown of subscribers. In 2013, it had 268,000 pay-as-you-go customers and 33,000 bill pay subscribers.

The company last month appointed Tadhg Dolly as general manager in place of Elaine Russell. Mr Dolly was previously Tesco Ireland's head of ecommerce.

Tesco Mobile was launched in October 2007. As with other MVNOs, it has struggled to gain traction in what is a highly competitive market dominated by established players such as Vodafone.

The Irish subsidiary of Lycamobile, another MVNO which “piggybacks” on the infrastructure of an established player, recently noted the difficulty that new entrants to the Irish market are experiencing. Publishing its full-year accounts earlier this year, which revealed a €6.76 million loss, Lycamobile said it had “proven difficult for any new entrants to achieve any scale” in Ireland.