UK supermarket MVNO Asda is to slash its ‘pay-as-you-go’ mobile tariffs in a bid to become the UK’s cheapest mobile provider. The supermarket, which is owned by US retail giant Wal-Mart, says it will halve its flat-rate per-minute calls from £0.16 to £0.08 and drop the price of a text message from £0.05 to £0.04 from September 1, reports The Times. The price reductions are believed to deliberately undercut the pricings of its cheapest rival MVNO, IKEA – the UK arm of the Swedish furniture company launched its MVNO earlier this month, charging voice calls at £0.09 per minute (national calls) and £0.06 for text messages. Asda, which uses Vodafone UK’s network, claims to have 150,000 mobile customers. A spokesman for uSwitch, the price comparison website, confirmed to The Times that Asda’s new tariffs would make its offering the cheapest flat-rate in the UK.
The report notes that the downward pricing trend in the UK’s MVNO market is in contrast to the country’s mobile operators, where prepaid prices are rising. According to the report, Vodafone UK will increase its minimum call charge for prepaid customers by 30 percent, from £0.15 to £0.20, next month, while T-Mobile UK and Orange UK are also set to increase prepaid tariffs. The price increases are reportedly an attempt by the operators to recoup lost earnings from recent regulatory developments, such as the new pricing caps on mobile termination fees.