Monzo
Digital bank Monzo is preparing to enter the UK’s mobile market, signalling a major shift that could pressure established telecoms providers.

Monzo, the London-based digital bank with over 13 million UK customers, has confirmed it is in the early stages of developing a mobile service. The bank plans to offer monthly mobile contracts through digital SIMs, aiming to address what it described as a 'pain point' for customers.

This marks a significant step in diversifying Monzo's revenue, which is still largely dependent on core banking services. The company is expected to operate as a mobile virtual network operator (MVNO), meaning it would lease infrastructure from major providers rather than build its own. This model allows MVNOs to compete on price, often undercutting established brands.

Growing Trend Among Digital Fintech Brands

Monzo is the third major fintech to signal a move into the mobile sector this year. Both Revolut and Klarna, which each have roughly 11 million UK users, also announced similar plans in 2025. All three are aiming to build broader ecosystems that lock in customers through multiple services.

By entering the telecoms sector, these firms are targeting the same kind of recurring revenue enjoyed by traditional mobile providers. For Monzo, the shift comes as it looks for ways to become users' primary account, a challenge that has persisted despite strong app engagement and rapid user growth.

This trend also mirrors wider moves by non-banking firms such as Octopus Energy, which is exploring its own mobile offering through a subsidiary. Together, these entrants represent a growing challenge to existing mobile operators.

Pressure Mounts on Traditional Mobile Providers

Monzo's entry into the market adds to pressure on long-standing telecoms groups like EE, VodafoneThree, and Virgin Media O2. If it launches with competitive pricing and perks, Monzo could quickly attract a portion of the market—particularly among its existing digital-first user base.

MVNOs already made notable gains in 2024. Research from Enders Analysis showed that MVNOs such as Tesco Mobile and Lebara added 1.6 million customers, while the UK's four largest traditional providers lost 180,000. It marked the first year on record where major carriers experienced a net loss.

Analysts say digital banks entering telecoms could have a 'significant' impact on market dynamics. With large customer bases to cross-sell to, companies like Monzo are in a strong position to offer cheaper deals and competitive roaming packages.

Monzo's Strategy and the Fintech Race

The move into mobile is part of a wider effort among digital banks to expand beyond basic financial services. Revolut, for example, reported £506 million (Approximately $645 million) in revenue from its wealth business in 2024, which includes crypto and stock trading.

Monzo, which has grown rapidly since its launch, still faces challenges in deposit retention and long-term profitability. By adding mobile contracts, it may increase the average revenue per user without relying solely on financial products.

With millions of existing users, Monzo could launch with a strong customer base from day one. For now, it says it is still developing the offering, but if launched, the move could signal the beginning of a new phase in the UK's telecoms and fintech sectors.

What's Next for Monzo?

Monzo has not confirmed a launch date, but it is expected to continue developing the service through 2025. The company's focus appears to be on digital SIMs, rather than physical infrastructure, which would allow it to scale quickly.

If successful, Monzo's entry could trigger further shifts in both banking and mobile industries, where convenience, pricing, and digital access continue to define consumer expectations. Competitors across both sectors are now likely to watch its next steps closely.

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