Source BWCS : Low-cost airline magnate Stelios Haji-Ioannou( inset ) threatened to push the UK mobile market into a price war yesterday with the launch of his latest creation EasyMobile.

However, not to be outdone, Charles Dunstone, CEO of Carphone Warehouse, immediately announced his company would undercut EasyMobile by as much as 50%. The two feisty entrepreneurs are now girding their loins for a price battle as each focuses on attracting customers via low-cost voice services and cheap text messages.

Fearing to be left out of any new-businessman battle Richard Branson’s MVNO Virgin Mobile chipped in with a stinging critique of Haji-Ioannou’s new service, which it pointed out, has no international roaming agreements in place yet. Meanwhile, waiting in the wings is Tesco, which says it is also planning a “very low-cost mobile service” as part of its Value economy brand.

The new kid in town, EasyMobile, is a joint venture between Haji-Ioannou’s EasyJet, which has leant its brand to the venture, and Danish mobile operator TDC. The company is offering to unlock phones contracted to rival services allowing customers to move to EasyMobile. It is also selling new SIM cards to users. EasyMobile says it will charge only £0.15 a minute for voice calls and £0.05 for text messages. For the first three months this will be £0.09 a minute for voice and £0.03 for texts. The company will have no retail premises of its own, trading exclusively over the internet.

The Fresh Mobile service operated by Carphone Warehouse has lost no time in retaliating and says it will offer voice calls for £0.075 a minute and text messages for £0.025. Head of the UK handset selling chain, Charles Dunstone, clearly feels that the owner of EasyJet is encroaching onto his (Dunstone’s) patch. He is quoted in today’s Independent newspaper as saying “The fact is that the mobile phone business is not an airline business. The price of mobile calling has been falling every year for the 15 years we’ve been in existence. There is a big market for simple, low-cost, no frills, everyday calls. We’ve helped create it. We're the price and service leader. We’ll stay the price and service leader.” He said.

Stelios Haji-Ioannou’s camp insisted that it will not lower its prices further to match Fresh’s offer. Speaking at the launch the airline tycoon said, “I am confident that the consumer will be thrilled with the combination of price and service offered by EasyMobile. Moreover I think that is why Orange is running so scared that they decided to take us to court over a spurious claim that we cannot use the colour orange. I have been using this colour for ten years and I will not stop using it now for anyone. Let the battle commence.”

No Easy Ride for EasyMobile is an article by BWCS.