Sainsbury's said it could not reach an agreement with network operator Vodafone

Sainsbury's mobile network to shut down

Sainsbury’s has announced it is shutting down its mobile network less than three years after it was first set up.

The supermarket set up its virtual network, which piggybacks a signal from Vodafone’s mobile towers, in July 2013.

Under a virtual network agreement, carriers such as Vodafone can opt to rent out some of their network capacity to another party so that it can avoid the high capital costs associated with setting up their own infrastructure.

Its rivals Tesco and Asda have set up their own similar services that run on O2 and EE’s towers respectively.

However, where Tesco Mobile boasts four million customers, Sainsbury’s had only managed to attract 150,000 to its network.

It is understood Sainsbury's and Vodafone pulled the plug on the joint venture after disagreeing over the future of the service.

Most of the customers affected are on sim-only pay-as-you-go deals and Sainsbury's said they will not be able to top up credit after November 14.

It is also advising them to use credit by January 15 2016, although it is understood customers will still be able to reclaim any outstanding credit after that time.

Sainsbury's apologised to customers on a message on its website, saying it wanted to make the process of changing mobile provider as "straightforward as possible".

The group added in a statement: "Our priority now is to help our customers and make sure they are inconvenienced as little as possible."

Despite the discontinuation of the network, the supermarket will continue to sell handsets in more than 300 stores.

Sainsbury’s previously launched a similar service called the ‘One’ network in 2001. It, too, shut down, after just two years.

Mobile phone group TalkTalk reportedly claimed that Vodafone was withdrawing entirely from the virtual network market in documents filed with the Competition and Markets Authority in July over the forthcoming merger between BT and EE.

It was recently agreed that mobile roaming charges in the European Union will be entirely scrapped by 2017.

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