Vodafone back in the broadband business
Mobile network to offer fibre broadband to its customers, raising doubts over Virgin Media merger
Vodafone is once again offering its customers fixed-line broadband, having previously pulled out of the market in 2011. Despite holding merger talks with the American owners of Virgin Media, Vodafone is partnering with BT to offers its new broadband service.
Vodafone will offer three tiers of home broadband: Ultrafast Fibre (up to 76Mbits/sec), Superfast Fibre (up to 38Mbits/sec) and ADSL (up to 17Mbits/sec). All packages come with unlimited usage (subject to the usual fair-use policy), a free router and free evening and weekend calls on the landline.
Prices are very competitive, especially for existing Vodafone customers. The top-end fibre product will cost only £10 per month (excluding £16.99 per month line rental) for the first year, and £20 per month thereafter. New customers will pay £25 per month. Superfast fibre will cost existing Vodafone customers £7.50 for the first year, and £15 thereafter, whilst ADSL starts from only £2.50 per month and £5 from year two.
Vodafone is in the process of installing its own equipment in BT exchanges, and so will initially only be able to offer home broadband to customers in Manchester, Berkshire and parts of Hampshire. The service will reach Essex, Hertfordshire and Yorkshire “in the next few weeks”, before going nationwide later in the year.
The mobile network has been practically forced to re-enter the fixed-line broadband market because of the increasing consolidation in the telecoms market. BT and EE are waiting for a £12.5 billion takeover to be approved by the competition authorities, whilst O2 and Three are also planning to merge, leaving Vodafone as the smallest of the standalone mobile networks. Sky and Carphone Warehouse are also launching their own mobile networks, meaning Vodafone is being squeezed from all sides.
The timing of the move back into the broadband market comes as a surprise, given Vodafone last week confirmed it was in preliminary merger talks with Liberty Global, the American owners of Virgin Media. A merger would instantly give the company access to Virgin’s fixed-line network, making its latest initiative redundant.
