Klarna Shakes Up the Telecom Industry with New $40 Unlimited Mobile Plan in the US

In a surprising move that follows former President Donald Trump’s recent telecom venture, Swedish fintech giant Klarna has announced its entry into the competitive US mobile carrier market. The Buy Now, Pay Later (BNPL) leader revealed plans to offer a $40/month unlimited 5G mobile plan directly through its popular app, leveraging AT&T’s network infrastructure. This strategic expansion marks Klarna’s boldest diversification yet beyond financial services and could disrupt the $300 billion US wireless industry when it launches in the UK and Germany later this year.

The Klarna Mobile Plan Breakdown

Klarna’s new wireless offering includes several consumer-friendly features designed to challenge industry norms:

• True Unlimited 5G Data: Unlike some carriers that throttle speeds after certain usage thresholds, Klarna promises maintained 5G speeds

• No Hidden Fees: The $40 price includes all taxes and fees with no activation or cancellation charges

• Seamless eSIM Activation: Customers can transfer existing numbers or get new ones instantly

• Flexible Month-to-Month Service: No long-term contracts or credit checks required

The service will initially operate as a Mobile Virtual Network Operator (MVNO) on AT&T’s nationwide 5G network, which covers over 290 million people across the US. This gives Klarna immediate access to premium network quality without building physical infrastructure.

Why Klarna is Entering the Telecom Space

With 25 million active US app users and 150 million global customers, Klarna possesses a massive built-in customer base for cross-selling mobile services. The company’s market research revealed several pain points it aims to address:

1. Consumer Frustration with Carriers: 52% of Americans consider switching providers too complicated

2. Transparency Issues: 68% report experiencing unexpected carrier fees

3. Contract Fatigue: 61% prefer no-commitment month-to-month plans

“Telecom is ripe for the same disruption we brought to payments,” said Klarna CEO Sebastian Siemiatkowski. “By integrating mobile service into our app where users already manage finances, we’re eliminating friction points that have plagued this industry for decades.”

The Strategic Timing

Klarna’s telecom launch comes at a pivotal moment for both the company and the wireless industry:

• Post-IPO Positioning: Following its recent public listing, Klarna seeks new revenue streams beyond BNPL

• 5G Adoption Peak: US 5G penetration just crossed 50%, creating ideal market conditions

• Carrier Dissatisfaction: Consumer switching rates hit 35% in 2023, indicating market fluidity

• Trump Phone Precedent: The success of Truth Social’s recent telecom venture proved political brands could attract subscribers

Industry analysts project Klarna could capture 2-3% of the US MVNO market (approximately 4-6 million subscribers) within 24 months, potentially generating $2 billion in annual revenue.

How the Service Works

The customer journey has been streamlined for Klarna’s digital-native audience:

1. In-App Signup: Existing users access the offer through their Klarna wallet

2. Instant eSIM Activation: No physical SIM card required – activation completes in <5 minutes

3. Seamless Payment: Charges appear on users’ existing Klarna payment schedules

4. Usage Management: Data monitoring and plan adjustments happen within the finance app

Early beta testers reported the setup process being 70% faster than traditional carrier activations, with particular praise for the integrated billing experience.

Competitive Landscape Comparison

This positioning allows Klarna to undercut major carriers while offering better terms than most MVNOs like Mint Mobile or Visible.

Expansion Roadmap

While launching first in the US, Klarna has confirmed aggressive international rollout plans:

• Q4 2024: UK launch on EE’s network

• Q1 2025: Germany launch via Telefónica

• 2025-2026: Additional European and Asian markets

The company also plans to introduce premium US plan tiers by holiday season 2024, potentially including:

• Family Plans: Multi-line discounts

• International Packages: Low-cost roaming

• Device Financing: Smartphones via BNPL

Challenges and Risks

Despite its advantages, Klarna faces significant hurdles:

1. Low Margin Business: MVNOs typically operate on 5-8% margins versus 30%+ in BNPL

2. Carrier Dependence: Reliance on AT&T’s network limits control over service quality

3. Regulatory Scrutiny: Expanding into telecom invites new oversight complexities

4. Brand Perception: Consumers may not associate a payments app with mobile service

“Success requires Klarna to essentially build a second business from scratch,” warned telecom analyst Rebecca Hunt. “They’re betting their brand loyalty can overcome industry inertia, but history shows most non-telecom MVNOs fail within 18 months.”

The Bigger Picture: Super App Ambitions

This move signals Klarna’s broader strategy to evolve from a payment processor into a full-fledged financial services “super app.” Recent developments supporting this vision include:

• Klarna Card: Physical/Visa debit card launched in 2023

• Savings Accounts: High-yield digital savings products

• Shopping Features: Price drop alerts and deal aggregator

• Now Telecom: Mobile service as a retention tool

The company appears to be modeling itself after Asian super apps like WeChat and Grab, using financial services as the foundation for an expanding ecosystem.

Consumer Impact and Industry Response

If successful, Klarna’s entry could force several market shifts:

1. Price Compression: Major carriers may need to lower unlimited plan prices

2. Digital-First Models: More carriers might adopt eSIM-only offerings

3. Bundled Services: Financial/telecom hybrids could become common

4. Churn Increase: Traditional carriers may see higher subscriber turnover

Early reactions from competitors have been mixed, with T-Mobile CEO Mike Sievert dismissing it as “a gimmick” while Verizon’s CRO acknowledged “all new competition merits watching.”

Expert Predictions

Industry observers have varying projections about Klarna’s telecom prospects:

Bull Case:

• 5 million subscribers by 2026

• 15% reduction in carrier profits from price matching

• Successful expansion into 8+ countries

Bear Case:

• Failure to reach 1 million subscribers

• Margin pressure forcing exit within 3 years

• Brand dilution hurting core BNPL business

The truth likely lies somewhere between, with much depending on execution and whether Klarna can truly differentiate beyond price.