Monzo explores UK mobile service as digital bank seeks new revenue lines

Monzo is exploring the launch of a UK mobile service that would operate on another carrier’s network, expanding the digital bank’s product set into a subscription-style telecom offering.

The plan, reported on Monday, would leverage eSIM technology and target existing account holders first, people familiar with the discussion said. Any service would be regulated and delivered as a virtual operator, with Monzo partnering on infrastructure while controlling the front-end customer experience.

A move into connectivity would align with the bank’s broader push to diversify fee income beyond interchange and lending, adding to premium tiers and budgeting tools. Monzo has grown rapidly in retail banking and small business accounts in the UK, but management has said it wants to build a “financial control centre” that bundles services customers already pay for elsewhere. A mobile plan could include data allowances, roaming options and integrated account controls in-app, according to early outlines described to the Financial Times’ news feed.

The UK’s mobile virtual network operator market is competitive, with established brands and retail tie-ups keeping prices keen. Analysts say Monzo’s differentiation would likely hinge on customer service, transparent pricing and integration with existing account features such as travel insurance add-ons and card security controls. Any offering would also have to comply with Ofcom rules on billing accuracy, switching and customer authentication, as well as the Financial Conduct Authority’s consumer duty where relevant to bundled financial services.

Monzo’s customer base, strong app engagement and real-time notifications could support cross-sell economics. But the bank would need to manage churn risk, wholesale network costs and potential capitalisation for handset financing if it decided to sell devices. Market observers note that the bank has been cautious about credit risk in the current cycle, prioritising disciplined growth. A light-asset telecom model focused on SIM-only plans would limit balance sheet usage while offering predictable recurring revenue.

Monzo declined to provide detailed timelines in the early-stage reporting. The company’s latest product experiments follow a period of strong customer acquisition and the roll-out of new savings options. Investors will assess whether the proposed mobile service can lift average revenue per user without eroding the bank’s brand for simplicity.