Monzo Challenges Telecom Giants with New Mobile Phone Service

In a move that could shake up the UK telecom industry, Monzo, the digital bank, is planning to launch its own mobile phone service. The bank is currently in the early stages of developing a digital SIM card, a software-based version of the traditional insertable chip used to connect phones to cellular networks.

This ambitious venture could open the door for Monzo to offer lucrative mobile phone contracts to both new and existing customers, putting pressure on incumbent providers like Vodafone, Three, and the BT-owned EE. The digital bank is known for its innovative approach, and this latest move is seen as an effort to diversify its revenue streams as it prepares for a potential initial public offering (IPO).

Monzo, which was founded in 2015, has already transformed from a scrappy newcomer to a fully licensed bank with over 13 million UK customers and more than 3,900 staff. The move into the mobile phone market could further boost the company's valuation, which was last pegged at £4.5 billion in October 2024.

While Monzo's valuation still lags behind its rival Revolut, which was recently valued at $45 billion (£33.6 billion), the digital bank has focused its growth primarily in the UK and has secured a coveted banking license from British regulators. This latest venture into the telecom space could help Monzo solidify its position as a disruptive force in the financial services industry.