Mobile by Sainsbury's to end in January

Credit: TreasureGalore/Shutterstock.com

The decision will affect more than 150,000 Mobile by Sainsbury's customers, most of who are on SIM-only pay as you go deals.

Sainsbury's have apologised, and say that their aim now is to ensure that customers "are inconvenienced as little as possible".

How are PAYG customers affected?

The supermarket giant say that pay as you go customers won't be able to top up their phones from November 14th.

They have also advised customers to use credit by January 15th 2016, when the service will be discontinued.

However, it is thought that customers may be able to reclaim any unused credit after this date. Sainsbury's say those who wish to do so should call 0333 313 1150.

Anyone with a handset from Mobiles by Sainsbury's should find the phone is unlocked, and will therefore work with a SIM card from another network straight away.

What about those with a contract?

Contract customers won't be able to renew after November 14th, and will lose service on January 15th.

Anyone whose contract ends after January 15th will only be charged by Sainsbury's for their plan up until that date.

SOURCE: Sainsbury's.

Sainsbury's have also said that contract customers can leave before January without being penalised.

Customers who wish to take their mobile number with them can request a Porting Authorisation Code (PAC) by calling the number above if they need further assistance on top of that.

What happened?

Sainsbury's teamed up with Vodafone more than two years ago to create the mobile virtual network Mobile by Sainsbury's.

The plan was to emulate and possibly overtake Tesco, who launched their MVNO in 2003. That venture has since become the largest branded mobile services provider outside of Three, O2, Vodafone and EE.

By comparison, Mobile by Sainsbury's has been a bit of a flop.

A Vodafone spokesperson said: "Given the performance and prospects of the Mobile by Sainsbury's business in the prevailing market conditions, the investment required to sustain the joint venture is not viable for Vodafone."

It's not particularly surprising that Sainsbury's mobile venture failed to take off. Competition is fierce, with more than 200 Mobile Virtual Network Operators (MVNO) and sub-brands in the UK.

Each slice of market share is now relatively small: GiffGaff, for example, have nearly one million customers and Talk Mobile approximately 750,000.

This is forcing the MVNOs into endless attempts to outdo one another.

One of the latest contenders, FreedomPop, gives people 200 minutes, 200 texts and 200MB of data each month free of charge.

Out of the game?

Rather than add to the heat, it seems that Vodafone may want out of the kitchen.

In July, TalkTalk submitted evidence to the Competition and Markets Authority (CMA) regarding the potential BT / EE merger, in which they claimed that Vodafone are "in the process of withdrawing entirely from the MVNO market".

TalkTalk themselves use Vodafone for their own MVNO, but announced last November that the partnership would be coming to an end, and that they'd be moving to O2 in the near future.

In their submission to the CMA, TalkTalk say Vodafone ended the agreement "without warning". Vodafone deny both that and the suggestion that they're leaving the MVNO market, but there's no denying they seem to be adjusting their focus somewhat.

Last month, Vodafone ended talks about a possible exchange of assets with Liberty Global, the US owner of Virgin Media.

The deal could have resulted in either Virgin Media or Vodafone's UK mobile network changing hands.

Where they have branched out, however, is with the launch of a fixed line broadband service - which was launched to existing Vodafone customers this summer, and is now being made available to non-Vodafone subscribers.

What next for Sainsbury's?

The cessation of Mobile by Sainsbury's isn't the supermarket's first failure when it comes to providing a mobile service.

In 2001, they launched Sainsbury's One - a venture that only last two years.

Undaunted, Sainsbury's say that they are "still interested" in providing a mobile service to shoppers - although who they will partner with next time is anyone's guess.

Meanwhile, a statement from the company says that they will "continue to sell mobile phones and accessories in our 38 in-store phone shops and to sell handsets in over 300 of our stores".

People looking for a new mobile phone deal in the meantime could do worse than starting with our comparison pages.