Phone House to Hang Up on German Mobile Services

The Phone House, Carphone Warehouse's German subsidiary, has said it is to pull out of the increasingly crowded German mobile service provider market. The company's decision marks what some analysts believe will be the first casualty in a highly competitive sector.

The Phone House said that from next year it will offer mobile products only on a resale basis. It has signed a resale agreement with T-Mobile Germany, effective from January 2008, and hopes to sign similar agreements with the other German mobile network operators. The Phone House, which blamed poor margins for its decision, will not be able to fully withdraw from the German mobile service provider market until the end of April 2010.

Only last month it was reported that Spanish-owned mobile operator O2 is planning to launch a new low cost mobile telephone service in Germany. According to press reports in Spain, the service will be available during the last quarter of this year. However, the former BT mobile operator has yet to comment on the stories. The new service, which will apparently be named Fonic, is seen as a riposte to established low-cost mobile services owned by T-Mobile and E-Plus in Germany: Congstar and Simyo.

KPN-owned E-Plus first introduced budget mobile brands to Germany in late 2005 when it launched Simyo. Other players in the German low-cost mobile market are EasyMobile, backed by Danish operator TDC, which offers cheap calls to any provider in Germany for a flat rate of euros 0.16 (US$0.19) per minute, and debitel and store chain Tchibo which offer calls at euros 0.15 a minute.