Tesco Mobile reports a £449,000 pre-tax loss despite achieving over £1bn in sales for their 2023 financial year.
- Revenue increased from £969.5m to £1.05bn, driven by higher-end handset sales.
- Contract customers rose by 6.2% while prepaid customer numbers declined significantly.
- Strategic focus on new product launches and innovative offerings marked the company’s response.
- The long-term joint venture with Virgin Media O2 was renewed for another decade.
Tesco Mobile, a notable joint venture between Tesco and Virgin Media O2, reported a pre-tax loss of £449,000 for the year 2023, a stark contrast to the £8.3 million profit recorded in 2022. Despite this financial setback, the company successfully crossed the £1 billion revenue threshold, with its revenue climbing from £969.5 million in the previous year to £1.05 billion. This increase was largely attributed to the sales of high-end smartphones, reflecting a dynamic consumer preference towards premium devices.
In response to the competitive mobile telecommunications market, Tesco Mobile extended efforts to recapture customer interest and market share. The company experienced a noteworthy increase in its contract customer base, which grew by 6.2% to 4.01 million. However, these gains were offset by a 9.4% decline in the prepaid segment, which fell to 1.50 million, highlighting shifts in customer behaviour and market pressures.
Amid these challenges, the company remains forward-thinking, aiming to expand its customer base by introducing new and innovative products and tariffs. By leveraging its unique position through partnerships, Tesco Mobile intends to remain competitive and address the evolving needs of its clientele.
2023 also saw Tesco Mobile complete a significant systems upgrade, transitioning postpay customers to a new provisioning and online charging platform. This system transformation is pivotal as it reflects the company’s commitment to enhancing service infrastructure and customer experience.
The decade-long renewal of the joint venture with Virgin Media O2, confirmed in January 2024, is set to strengthen operational foundations and cross-synergies between the two corporations. Established in 2003, this coalition evolved into a formalised joint venture in 2017, underpinning Tesco Mobile’s strategic market positioning.
Tesco Mobile’s financial resilience is challenged amidst strategic shifts and market dynamics, underscoring the complexities of the telecom sector.
