By now, we're all familiar with the system that means when you buy a new phone, one company makes the device and another provides the network connectivity. It's a tried-and-tested model, one that has served us pretty well over the years. But now one phone maker has decided to shake things up.
HMD Global, the maker of Nokia phones, is launching its very own network in the UK that it's hoping to gradually roll out to other countries too. It means that now when you buy a Nokia phone from HMD, you'll have the option of also choosing to sign up for its network. (You can sign up even if you don't have a Nokia phone, but it feels like they're built to go together.)
The HMD Mobile service will launch in late April and will be what is known as a mobile virtual network operator, or MVNO, meaning it will piggyback on top of one of the big established carriers with their own network infrastructure, much like GiffGaff and Tesco Mobile already do. (HMD hinted, but would not confirm, that it's working with EE). Bundles will start from £6.50 per month for unlimited UK/EU calls, texts and 1GB of data per month, and will be available through Nokia's website.
The wireless reseller won't offer 5G from launch, but HMD said the goal is to make it "5G ready." Ensuring its network offers 5G will be an important step for HMD, given that one of the key attractions of its new Nokia phone lineup is that they incorporate 5G chips on a budget.
The decision to branch out into offering network services was motivated by the growing popularity of buying a new phone online, rather than going to a physical retail store, said HMD Global CEO Florian Seiche in a briefing ahead of the company's Thursday launch event. "The main idea is to extend that purchasing experience, to make it as seamless as possible," he said.
The launch of HMD Mobile is a "bold move" that signals the company's attempt to grow phone sales rather than become a network in its own right, said CCS Insight analyst Ben Wood. "The growth in online sales as a result of the pandemic has seen a shift where phones are sold, and being able to marry airtime with the device and offer this combined package at a single price will allow HMD Global to take a slightly different approach to rival smartphone makers."
In the past, mobile operators in the UK have sold own-brand phones made for them by phone manufacturers in China. But, said Wood, this is the first time a mobile maker has launched an MVNO in the country -- although PC makers have gone down this route before, striking deals with networks to offer bundled data.
In the mid- and low-tier Android phone market, where Nokia phones tend to sit, competition between phone manufacturers is fierce, and companies must work hard in order to differentiate their products. Along with its new lineup of phones, HMD is hoping that offering them with bundled data for a single predictable price will give it a "a competitive edge," said Wood.