How telco More banked a big four deal that has trebled its customer base

CBA has increased its stake in virtual telco More which has more than trebled its customer base since signing a deal with the bank in 2021.

Andrew and Richard Branson, the founders of telco and internet provider More and Tangerine. Picture: Carmen Zammit

CBA is betting big that its customers will continue to take up telco services from the bank, and is increasing its investment in its virtual telco partner, More, to a 30 per cent stake.

About 140,000 of the bank’s customers have switched to a discounted mobile, internet or NBN service from More since the telco and bank struck a partnership in 2021 – at the time for a 25 per cent equity stake.

That deal has proven quite successful for the telco which has since more than trebled its customer base, growing from 70,000 at the time the deal was first announced to more than 250,000 today, across both More and Tangerine services. The number of CBA customers taking up services accounts for more than half of that number.

The increased brand awareness More gets from the bank and a cost-of-living crisis were resulting in more customers joining the telco, which, according to co-founder Andrew Branson, could get away with charging far less than competitors.

“There is a real gap in price between what the majors are charging versus what we’re charging, especially with that CommBank discount,” he said.

When CBA first reached out to More more than three years ago, Mr Branson said it was a real “pinch yourself moment”.

During the call Mr Branson said he had to ask himself the question: “Is this a legitimate call or is this someone sort of playing with us?”

“The initial impression was quite amusing, if I’m honest, just because it did come totally out of the blue,” he said.

It turned out the call was legitimate and one CBA had been planning for some time. Ben Morgan, the big four bank’s general manager of strategy, investment and transformation, said CBA had been examining all the telcos and was seeking a partner it could grow with.

CBA strategy, investments and transformation general manager Ben Morgan.

“We were trying to find that sweet spot with a company that was sort of not too big because we wanted to grow together, but also not too small so that it could scale,” he said.

“Many years ago we started to look for a few strategic partnerships as part of our plans to form deep partnerships with our customers and that’s now sort of coincided with our loyalty piece.”

CBA launched a new update to its mobile app overnight which will allow customer to check their data usage as well as their plan under a services tab, as well as view their telco bills and pay them directly.

The bank will also begin to offer those in its new loyalty program called CommBank Yello, which provides up to 40 per cent off More NBN so long as they pay with a CBA card.

“I think that is a great Australian first in terms of being able to do this with your NBN or mobile provider in a banking app,” Mr Morgan said.

CBA had noticed more customers were open to finding new service providers at a lower cost in the current economic environment. “We’re certainly seeing people shopping around a lot more. I’m sure everyone’s doing the same in their own little different ways,” Mr Morgan said.

Viewing More bank data usage within the CBA app.

More Australians were getting comfortable with the idea of changing their mobile provider and now understood they wouldn’t lose their number, Mr Branson said.

“We recently launched eSim so customers can change over their SIM almost instantaneously, they don’t have to wait for us to post out a SIM card or anything like that,” he said.

“I certainly think people are becoming more comfortable with swapping and changing whereas in the early days of NBN, they really were nervous around that.”