Digital bank Monzo is muscling into the mobile market by launching a phone plan that gets cheaper the longer a customer stays.
Customers of the bank can join a waiting list for the mobile service that is built on the Virgin O2 network and will be rolled out in the summer.
Monzo’s entry to the market is set to intensify competition among phone providers which are already being challenged by newer players such as Revolut and Klarna.
The bank, which has more than 15 million customers, said its phone plan challenges the traditional mobile model by rewarding, rather than penalising, long-term loyalty.
Customers can get 5% off their monthly bill each year, resulting in a discount of up to 30% over time.
It is offering three plans using a digital sim and with varying data allowances, costing £8, £12, and £20 a month.
Since 2025, new rules have cracked down on phone and broadband providers increasing prices in the middle of a contract without warning.
But some firms have continued to come under fire for effectively penalising loyal customers with inflation-linked mid-contract price rises, with Chancellor Rachel Reeves writing to bosses last year to demand more protection for consumers.
Like other new providers, Monzo aims to circumnavigate the issue of mid-contract price rises by designing plans that do not tie people in for a year and do not charge an exit fee – but that does not mean it cannot raise the prices of its plans at any time.
In the UK, only four providers operate their own network infrastructure – EE, Virgin Media O2, and Vodafone and Three.
But numerous smaller providers, known as virtual networks, piggyback off their signals – with Monzo using the Virgin Media O2 network for its service.
Financial firm Revolut began rolling out a phone plan earlier this year which runs on the Vodafone network, and offers unlimited 5G, calls and texts in the UK for £12.50 a month.
