Tesco Mobile has sunk into losses despite surpassing the £1bn sales threshold in its latest financial year, as recent accounts filed at Companies House show.
The mobile provider, a collaboration between Tesco and Virgin Media O2, reported a pre-tax loss of £449,000 for the year 2023. This is a downturn from the £8.3m pre-tax profit seen in 2022, as reported by City AM.
Revenue for the venture rose from £969.5m to £1.05bn this year, bolstered by increased sales of high-end handsets.
According to a board statement, "The group delivered a strong performance in 2023 against the backdrop of highly competitive mobile telecommunications market in which the overall handset market size continued to decline."
Focus shifts for Tesco Mobile as it aims to recapture customers.
Tesco Mobile disclosed that challenges in "market pressures" and shifts in "changes in customer behaviour" led to a decrease in its prepaid segment while its contract customer numbers experienced growth.
The company's total customer count concluded at 5.51m in 2023, slightly up from 5.43m the previous year.
The number of contract customers climbed by 6.2% to 4.01m, whereas the prepaid sector saw a reduction of 9.4% to 1.50m.
To counteract these changes and grow its base, Tesco Mobile said: "The group intends to continue to increase its customer base by launching new and innovate products and tariffs into the marketplace, whilst continuing to harness its unique supermarket mobile positioning in partnership with Tesco."
The group commented: "In early 2023, the group successfully completed migrating postpay customers to a new provisioning and online charging platform as part of a major multi-year system transformation programme."
This news closely follows the partnership renewal between Tesco Mobile and Virgin Media O2; the two businesses solidified their 50:50 joint venture for another ten years in late January 2024.
Established in 2003, the enterprise transitioned into a joint venture in 2017.