Digital bank Monzo is entering the mobile market with a new phone plan that becomes cheaper the longer a customer stays, challenging traditional providers. Customers can join a waiting list for the service, which uses the Virgin O2 network and will launch this summer.
How the Plan Works
Monzo’s plan offers a 5% discount on the monthly bill each year, up to a maximum of 30% over time. It uses a digital SIM and comes in three tiers: £8, £12, and £20 per month, with varying data allowances. Unlike many contracts, there is no fixed term or exit fee, though Monzo retains the right to raise prices at any time.
Competition in the Mobile Market
Monzo joins other financial firms like Revolut and Klarna in offering mobile services. Revolut launched a plan earlier this year on the Vodafone network, providing unlimited 5G, calls, and texts in the UK for £12.50 per month. The UK has only four network operators—EE, Virgin Media O2, Vodafone, and Three—but many virtual networks use their infrastructure.
Regulatory Context
Since 2025, new rules have banned phone and broadband providers from raising prices mid-contract without warning. However, some firms still face criticism for inflation-linked increases that penalize loyal customers. Chancellor Rachel Reeves wrote to bosses last year demanding better consumer protection. Monzo aims to avoid such issues by offering flexible plans, but it does not guarantee price stability.
Monzo, with over 15 million customers, says its model rewards long-term loyalty instead of punishing it. The bank hopes to intensify competition in the mobile sector, where newer players are already challenging established providers.
