Vodafone has moved in on the fiercely competitive market for residential broadband telephony services, unveiling a tie-up with BT that will see it launch bundled mobile and land-line packages before the end of the year.
The deal, which represents the latest evidence of mobile providers moving into the provision of land line services, further cements Vodafone’s relationship with BT.
Having reached a partnership agreement in 2004, BT and Vodafone have already launched BT Fusion, which offers combined mobile and land-line services.
Last December, the two struck a five-year managed contract deal through which Vodafone provided connection services for almost half BT’s land-line sites.
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Vodafone follows O2 and Orange into the land-line market, which now represents part of the four-way convergence between mobile, fixed, broadband and internet and TV services.
But today’s alliance is a blow to Cable & Wireless, which in its efforts to become a substantial wholesale supplier had hoped to secure the Vodafone contract.
Nick Read, the chief executive of Vodafone UK, said: “Today’s announcement is a strategically important step in the evolution of Vodafone’s business in the UK. This news is further evidence of Vodafone delivering on its strategy and providing its customers with a total communications solution wherever they are.”
Chris Williams, communications expert at uSwitch.com, the price comparison and switching service, said: “It’s no surprise that Vodafone is moving into broadband. Quite simply, if they do not provide the services that other providers such as O2 and Orange offer, then they risk losing customers. By Joining forces with BT, Vodafone guarantees almost 100 per cent national coverage and, most importantly, allows them to bring the product to market in as short a time as possible.
“As far as the customer is concerned, we expect the product to be priced competitively, with a strong emphasis on value-added services. With another big mobile player being drawn into the broadband market, it is important that consumers are not confused by the range of offers and continue to seek out the best deal for their needs.”
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The move comes as Vodafone moves to quell shareholder unrest about its strategy under the leadership of Arun Sarin, the chief executive. Mr Sarin has been under pressure to act amid a stagnant share price and worries it is not adapting its business swiftly enough to deal with the reshaping telecoms market.
And it comes less than a week after the group rehired Vittorio Colao, its former regional boss for southern Europe, the Middle East and Africa, as deputy chief executive.
Mr Colao is seen as a serious potential successor to Mr Sarin and has been associated with Vodafone for almost 10 years.
Shares in Vodafone gained 1p to 114.5p. The group has a stock market value of almost £60 billion. For more on the shares click here