The Commonwealth Bank of Australia (ASX: CBA) share price is inching ahead on Monday. Meanwhile, shares in Telstra Corporation Ltd (ASX: TLS) are failing to get the same treatment.
You might point out: CBA and Telstra are two companies operating in two distinctly different markets — the former, banking and the latter, communications. However, a move made by Australia's largest bank could be blurring those lines.
In light of news this morning, CBA shares have retaken their position trading above $100 apiece. At the time of writing, the CBA share price is 1.22% ahead at $100.49.
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Is CBA trying to eat Telstra's lunch?
In a media release this morning, CBA unveiled that it will now provide discounted 4G and 5G mobile SIM plans via a telecom partner.
According to the release, Australia's major bank will buddy up with More, a national network services provider with its head office in South Melbourne. According to the company's website, the telecom company appears to differentiate itself from other mobile virtual network operators (MVNOs), partly with its ESG focus.
The partnership between More and CBA will allow the bank's customers to secure 30% off mobile SIM plans for the first 12 months. Additionally, continuing customers will maintain a 10% discount indefinitely after the first year.
Does this mean that CBA is waging war on Telstra's turf? Well, not exactly, but inadvertently, sort of…
It appears the initiative is being used to further entice people to become CBA customers. Though, the network offering is not operated by ASX-listed CBA.
Furthermore, More is not a telecommunications company with its own infrastructure. Instead, it piggybacks on Telstra's mobile network. That means Telstra has a degree of control over what More could offer to its customers.
Nevertheless, if CBA's discounts incentivise people to choose More over Telstra, then — to an extent — it would make the two foes.
Why the move from an ASX bank share like CBA?
CBA's decision to offer discount mobile plans follows research showing more Aussies are looking at ways to save money right now.
It probably doesn't come as a surprise — during multi-decade high rates of inflation and rising interest rates — that 45% of Australians are seeking cheaper mobile plans. In addition, 60% of those surveyed by CBA would change their plan if they were able to get a better deal.
Ultimately, CBA is still an ASX-listed bank. Though, with a tightening property market, we could see more moves for customer acquisition.
The CBA share price is down 1.9% since the start of the year. Whereas, Telstra shares have tumbled 8.8% on the ASX over the same period.
