Zip Co (ASX:ZIP) shares have tumbled 9% following the announcement of its strategic expansion into the telecommunications sector via the launch of ZMobile.
Developed in partnership with TPG Telecom (ASX:TPG), the new mobile service is designed to diversify the buy now, pay later provider's revenue streams and cement customer loyalty amidst ongoing cost-of-living pressures.
The prepaid offering, which utilises TPG's extensive network covering 98.5% of the Australian population, will initially debut for existing app users before a nationwide rollout later this year.
While the "capital light" venture targets recurring household expenditure, the market reaction remained lukewarm, with the stock's sharp decline today partially retracing a nearly 20% rise recorded in the previous session.
At the time of reporting, Zip Co's share price was $1.81.