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By Jo Best, 10 August 2004 16:40

NEWS Stelios Haji-Ioannou - founder of easyGroup - has today announced the launch of the company's own mobile virtual network operator (MVNO), easyMobile.

It's a soft launch, however. Don't expect to be able to purchase an easyMobile just yet - or, in fact, at all.

The easyMobile service won't sell or subsidise handsets. Punters can buy airtime and SIM cards but will have to supply their own handsets. There will be no high street shops either, just internet purchases. Speaking at the launch today, Stelios said that easyMobile was in talks with mobile operators to buy airtime but no network deal has yet been concluded.

It's a deliberate move, he said, but expects it to be "with one of the usual suspects - no surprises there". Until the network agreement has been settled, easyMobile won't be releasing details of roaming agreements or prices but said they will be significantly lower than everyone else's.

The first place to see a full-on launch will be the UK - Stelios predicts it will be this summer, or "at the latest, the last quarter of the year", with 11 other countries - the Czech Republic, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Portugal, Slovenia and Spain - to follow suit. No dates have been set for their launch, however.

Entering an already crowded market, can Stelios make the operation work? He certainly thinks so.

"[easyMobile] makes customers that are unprofitable under current business model profitable," he said. "It's predicated on the fact that 90 per cent of the population actually owns a mobile phoneÂ… BlackBerries, blueberries whatever you call them, everyone has a handset."

While the market for mobile phone users is nigh-on saturated, there looks to be enough voice traffic to grow round for a while yet. Analyst house Frost and Sullivan predicts that by 2007, 49 per cent of voice revenues will come from mobiles, up from 38 per cent in 2000.

Strand Consult also believes there's a healthy future for easyMobile. "There is no doubt that web-based discount MVNOs are here to stay - just like the discount airlines - so the question is not really will they do it but rather just how big a double-digit percentage will they take?" the research firm said in a report.

Stelios has buddied up with a Danish telco, TDC, to create its own mobile brand in the style of the Danish company's successful operator, Telmore, which has snatched an 11 per cent market share in its home country.

There, the MVNO model has flourished, with the telcos offering cheap, fixed price voice mintues and texts and selling via a single website.

Consumers in Denmark have also benefited from the trend towards MVNOS, with prices for voice calls and SMS dropping by 57 per cent since their entrance to the marketplace, according to Strand Consult.

The move will give Virgin Mobile some serious competition in the market and it could well be Virgin that Stelios has in his sights. Virgin, currently the UK's fifth largest operator, with over four million subscribers at last count, also operates as an MVNO and piggybacks on T-Mobile's network.

"If anyone's going to get those one million customers it will be me," he said, adding: "The one million is an example - I'm not getting into numbers."

While Virgin might be biting its fingernails, Orange hasn't taken it lying down - the company has threatened easyMobile about using its trademark orange colour in the mobile market. Stelios said he believes the case has no merit, that the France Telecom-parented operator was scared of the competition, and that if needs be, he'll see them in court.

So is there anywhere Stelios won't be going? "You won't see easyFuneralsÂ… it's not price-elastic and it's not fun," he said.