Orange is close to signing Lycamobile as its second ethnic market MVNO.
The two parties were still negotiating terms as Mobile News went to press (July 23). Neither would comment.
Lycamobile, a subsidiary of calling card company Lycatel, is the richest ethnic market MVNO, winning share on the continent with aggressive pricing, marketing and commissions.
Lycamobile was expected to sign with T-Mobile, with which it already works in Holland. But sources claimed its relationship with T-Mobile there has soured over SIM card allocations.
A T-Mobile UK spokesman said: "There is no intent to form a relationship with Lycamobile".
It has also held discussions with O2 about a UK venture, but O2 is understood to be reticent about new wholesale ventures.
The UK ethnic market for mobile is considered to be around eight million. Lycamobile chief Milind Kangle reckons it can take a 60 per cent share and sign 750,000 customers within a year.
It has signed Dextra to distribute its SIMs in the UK and claims to have a distribution channel of 150,000 for calling cards already.
The total UK wholesale market is estimated to be worth £1 billion, and is predicted to jump to £2 billion by 2012. T-Mobile takes around 60 per cent of the market via its Virgin Mobile MVNO deal.
Vodafone has 17 per cent via BT Mobile, Asda Mobile, Talk Mobile, Lyca rival Lebara Mobile and TomTom.
It also takes incremental revenue from Nomi Mobile, which runs off BT Mobile.
O2 has around 17 per cent too, via its Tesco Mobile MVNO, which is closing on two million customers.
Orange lags behind. Its management team, led by Virgin Mobile co-founder Tom Alexander, is understood to be keen on wholesale. It works with IDT Mobile and ad-funded MVNO Blyk.
Negotiations with Orange are likely to put Lycamobile’s scheduled August launch back.
Meanwhile Nowtel, the UK’s number two calling card business, is preparing its own UK MVNO bid.