Woolworths will cease selling mobile services on the Optus network from October 1, 2013, as Optus again culls the number of resellers that can access its network.
In yet another sign that the mobile virtual network operator (MVNO) market is shrinking, Optus has confirmed that it is ending its agreement with Woolworths.
Woolworths launched its prepaid mobile service through Optus just over two years ago, offering an AU$2 SIM card with AU$29 or AU$49 recharges for 45 days or 5GB of data.
Optus confirmed to ZDNet that it is in the process of ending its agreement with Woolworths Mobile, and that customers would no longer be able to purchase a SIM from October 1.
"Existing Woolworths Mobile customers can continue to recharge in-store and online for another 12 months. After this time, customers can recharge by purchasing an Optus recharge voucher," an Optus spokesperson said.
"Customers who have a Woolworths Mobile prepaid product will continue to receive all the same great value and benefits that Optus customers have."
A spokesperson for Woolworths said that the supermarket giant was exploring its options.
"We are currently reviewing our options to ensure we can continue to offer a great value prepaid service to our customers. For the next 12 months, existing customers will not be impacted by this change and can continue to use Woolworths Mobile, with all the same benefits, features and inclusions."
The announcement comes as Optus and Vodafone have both recently moved to reduce the number of MVNO resellers on their respective networks, which has led to the demise of brands such as Red Bull Mobile, and Crazy John's. The decision to terminate Optus' deal with Woolworths comes in stark contrast of comments made by Optus CEO Kevin Russell in August that Optus had recently signed new agreements with around 20 of Optus' MVNO partners.
Both telcos were understood to have rejected approaches from former ISPOne reseller Kogan Mobile.
Vodafone CEO Bill Morrow told ZDNet in August that the MVNO market would now struggle in Australia, unless it could differentiate itself on value outside of low-cost data plans.
"I think there's a different form of competition, over-the-top-type applications that are going to enter in, but MVNOs I think are going to start to taper off quite significantly," he said.
"We've moved to much more of a data [era], and data on the network is much more demanding from a cost point of view, so the model has changed. MVNOs can't survive on just a voice- and a text-only-type offer," Morrow said.