BT considering low-cost mobile brand amid Revolut and Monzo’s telecoms push

BT Group is said to be considering plans to launch a new low-cost mobile phone brand as part of a potential strategy to compete with a wave of new entrants to the market – including fintech heavyweights Revolut and Monzo, both of which are preparing to launch mobile services for the first time.

According to Financial Timesthe UK’s largest telco, is evaluating whether to develop an in-house budget brand or acquire an existing virtual network operator (MVNO) as it explores opportunities to re-enter the value end of the mobile market.

Such a move would represent a strategic shift for BT, which currently only offers mobile services through its premium EE brand and whose Plusnet subsidiary has focused on broadband since a restructuring last year.

The push comes as virtual network operators – companies that lease capacity from existing networks such as EE, Vodafone and Three – are expanding rapidly, to account for 16.5% of the UK mobile market in 2024, according to Ofcom. Analysts expect this share to rise as competition intensifies between low-cost and digital-first providers.

Fintech companies are among the latest entrants. Revolut and Monzo, which have a combined user base of more than 13 million customers in the UK, are preparing to launch mobile plans as part of broader efforts to diversify revenue streams and boost customer loyalty through bundled financial and telecom services.

Buy now, pay later service Klarna is also moving into mobile, along with Fern Trading, part of the investment empire of Octopus Group, which is building telecoms assets across the UK.

“Fintech companies are blurring the lines between banking, payments and connectivity,” said James Barford, head of telecom research at analyst firm Enders. “They already dominate the digital interface with consumers – and moving to mobile services is a natural extension of that ecosystem.”

BT’s exploration into the low-cost sector is being led by chief executive Alison Kirkby, who took up his role earlier this year. Kirkby is understood to be looking for ways to boost customer acquisition in a saturated market and expand BT’s appeal beyond its upscale EE brand.

Industry sources told the Financial Times that the plan has the support of Sunil Bharti Mittal, the Indian billionaire and founder of Bharti Enterprises, which became the largest shareholder in BT in 2024 after acquiring the stake held by French-Israeli telecom tycoon Patrick Drahi.

This potential move is consistent with Mittal’s strategic focus on affordability and market scale – principles that have underpinned his success with Airtel, one of India’s largest mobile networks.

The telecoms group is also reviewing the positioning of its consumer brand BT, which has strong recognition among older customers. Executives are said to be considering a revival of BT-branded broadband and mobile packages aimed at traditional users who are less familiar with the company’s new brands, EE and Plusnet.

Research by BT is said to have found that brand familiarity remains a key factor in attracting and retaining older customers, especially as competitors emphasize simplicity and value.

“EE has become a high-performing brand for power users,” said Sarah Hall, communications consultant at Pegasus Strategy. “But the mass market is where the volume growth lies – and this is where fintech competitors attack first.”

In response to the reports, BT issued a brief statement: “We regularly review our offers across all our brands to ensure our customers have access to the best products and services on the best network. Currently, we have no plans to change our mobile offers.”

However, analysts say BT’s silence may reflect early-stage deliberations rather than a rejection of the idea. The group faces increasing pressure to defend its consumer market share, as value-driven entrants such as Giffgaff, Smarty and Voxi continue to attract younger users with flexible app-based contracts and transparent pricing.

The UK mobile market is experiencing one of the most significant shake-ups it has seen in years, driven by digital disruption, consolidation and rising network investment costs.

BT has already faced competitive pressures in the wake of the Vodafone-3 merger, while also facing the challenge of monetising its multi-billion pound investment in 5G infrastructure.

Meanwhile, fintech companies are looking at telecom as a lucrative gateway to everyday digital services – allowing them to bring together banking, payments and connectivity within a single app and harness rich data insights to drive growth.

“If Revolut and Monzo succeed in turning mobile services into lifestyle ecosystems, they could redefine customer loyalty in both finance and telecoms,” said Dr Anna Pickering, senior lecturer in digital economics at King’s College London. “BT and the legacy networks cannot afford to ignore this.”

While BT insists no formal decision has been made, the discussions underscore how the rapid convergence between telcos and fintech is forcing incumbents to innovate or risk losing relevance among younger, mobile-first consumers.

If BT advances, the low-cost mobile brand will not only be able to protect its domestic market share, but also act as a strategic counterweight to digital rivals seeking to undermine the dominance of incumbent British networks.

Either way, the battle for the UK’s mobile future is no longer just about connectivity – it’s about who controls the relationship with customers in an increasingly digital world.