HMD Global expanded its ambitions beyond the release of Nokia-branded handsets, partnering with U.K. operator EE to launch a new MVNO service.
Dubbed HMD Mobile and rolling out at the end of April, the new MVNO will allow customers to sign up for a wireless plan on the company’s Nokia device website and manage their accounts through an Android app available on Google’s Play Store. The company said its play builds on the earlier launch of its global roaming product, HMD Connect, in March 2020.
Florian Seiche, CEO of HMD Global, in a statement called the MVNO move “a milestone in our journey to a holistic provider of all things mobile,” adding in a separate comment “we are listening to our fans. We have seen how much they are responding to online shopping and wanted to go one step further.”
Service will initially be offered in the U.K. on EE’s network, though the company said it is planning a “gradual global rollout.”
Pricing will start at £6.50 per month for unlimited calls and texts in the U.K. and European Union with 1 GB data, with additional options set to offer up to 25 GB of data. HMD Global could not immediately be reached for comment, but CNET reported the service will not include 5G access at launch.
Friend or foe?
Moor Insights and Strategy Analyst Anshel Sag told Fierce he believes there were several reasons behind HMD Global’s decision to make an MVNO play, primarily that the company’s “market success hasn’t necessarily been as good as I think the company would’ve liked and the Nokia brand isn’t as strong as it once was.” Thus, the company is now looking for more ways to draw consumers to its brand, he said.
Despite this, he said he was “surprised” by the announcement, noting it is unlikely “that operators that have worked with HMD Global in the past to offer low-cost devices are particularly pleased that they are now a competitor.”
Avi Greengart, president and founder of analyst company Techsponential, agreed in comments sent to Fierce.
“Selling inexpensive phones is a brutal, often unprofitable business, and HMD has been struggling to carve out a space against a half dozen Chinese brands aggressively expanding outside their home market. An MVNO provides recurring revenues and a longer customer relationship. However, it also means competing with one of the primary distribution channels for smartphones: carrier retail.”
Long-term, Sag said he believes HMD can likely provide “right-priced plans that match the economics of its own users, that might possibly integrate both service and devices for one very low monthly payment.” But he added it will need to transition to 5G service as soon as possible to take advantage of the entry-level market for the technology and “the potential economies of scale available there.”