Vodafone Enters UK Broadband Arena

11 September 2006

LONDON: Cellphone giant Vodafone is moving into the fiercely competitive UK residential broadband market via a strategic tie-up with telco BT Group.

The service is expected to launch before the end of the year and follows similar moves by rival groups such as O2 and Orange.

Vodafone says in a statement: "This partnership enables customers to benefit from bundled packages of mobile and broadband services nationwide, due to BT's unique footprint in the UK."

The cellphone network provider's deal with BT involves the leasing of wholesale capacity, rather than putting its own equipment into local telephone exchanges - a move that will give it immediate nationwide coverage.

Until recently, Vodafone had prided itself on being a 'pure play' mobile operation, unencumbered by a declining fixed-line business.

But as fixed and mobile businesses move to cheaper, bundled services, the firm has had to change tack.

Vodafone, with 16.2 million UK customers, said in May it was aiming to get up to 10% of its annual revenues over the next three to four years from its new 'Mobile Zone' businesses, including converged fixed-mobile internet services.

Data sourced from BBC Online; additional content by WARC staff