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UPDATE Vodafone Return to the UK Home Broadband Market in Spring 2015

Tuesday, November 11th, 2014 (11:49 am) - Score 2,048

Mobile operator Vodafone has officially announced that it will have a second stab at the United Kingdom’s residential fixed line broadband market when it launches a new service for homes during Spring 2015.

ISPreview.co.uk readers will know that today’s development has been predicted for at least the past 12-18 months, with Vodafone repeatedly being spotted taking part in talks with everybody from Sky Broadband to Virgin Media’s parent Liberty Global (here and here). But so far no deal has been secured, although the operators CEO (Vittorio Colao) has always made it clear that a consumer broadband option in the UK was a strong possibility.

Instead Vodafone has now said that they intend to leverage their existing infrastructure acquired via Cable & Wireless Worldwide (CWW), which is already being used to supply a number of businesses and residential focused ISPs with unbundled (LLU) broadband and other connectivity services.

Vodafone Statement

Our fibre deployment plans in Italy, Spain, Portugal and Ireland are progressing. We have recently launched a combined fixed broadband and TV service in the Netherlands, and are announcing today our plans to launch residential broadband services in the UK in Spring 2015, leveraging the infrastructure acquired with Cable & Wireless Worldwide (‘CWW’). Taking into account our wholesale agreements we have access to fibre passing 42 million homes across Europe, representing 29% of households, of which 4.4 million households actively use our fibre services.

The move is a risky one, not least because Vodafone’s previous attempts to offer an affordable home broadband service (aka – Vodafone At Home) died a slow death in 2011 (here), which we’d say failed in part due to a lack of support to keep the product competitive and well promoted. Mobile operators also have a generally poor history of making UK consumer broadband work, although EE appears to finally be making some success of the model.

Crucially Vodafone’s move back into the UK’s home broadband market appears to be at least partly fuelled by BT’s forthcoming Q2-2015 plan to re-enter the consumer mobile market with a 4G product (it’s no coincidence that both operators are targeting Spring 2015). Certainly there’s a lot of bad blood between the two after BT swapped their Mobile Virtual Network Operator (MVNO) deal from Vodafone to EE earlier this year (here).

But Vodafone will need to put significantly more effort in if they are to make such a product successful the second time around. Anybody familiar with this already saturated market will tell you that making money from home broadband, which is an aggressively competitive field, is no easy task. On the other hand we can only hope that Vodafone understands that reality better than most, which might be just the boost it needs to do something different.

At this stage we don’t know quite what Vodafone has planned but, short of building their own fibre optic broadband infrastructure to rival BT, we’re struggling to see how they’d be able to break into the market in any kind of successful way. Merely offering ADSL2+ based copper broadband is no longer enough and they’re unlikely to be able to differentiate an FTTC package too radically from rivals, especially as the underlying costs are still largely set by BT.

UPDATE 12th November 2014:

Several other reports on this news appear to be confirming that Vodafone will also offer a TV product (YouView?) to the UK consumer market, although we haven’t yet been able to get a confirmation from the operators PR team. Never the less it would be a fair bet to say that they’d also offer TV.

Leave a Comment
5 Responses
  1. Avatar dave says:

    Why are vodafone doing this, EE is the merger of Vodafone+Orange. It seems so stupid to have 3 seperate companies. Just have EE, move everyone’s vodafone and orange contracts over to EE. That is just 1 website to maintain, less call centre staff etc. They already have EE FTTC broadband, it makes no sense to have vodafone broadband too.

    I still think it is crazy that Virgin was bought out by Liberty Global for £19bn or whatever it was, you could lay fibre optic cables to every home in britain for a similar price to that.

    I wonder if Virgin will drop their broadband price now that FTTC is available in around 70% of homes.

    1. Mark Jackson Mark Jackson says:

      EE is the merger of T-Mobile and Orange UK, Vodafone doesn’t come into it.

    2. Avatar Ignitionnet says:

      Buying Virgin gave Liberty a ready made ISP and cable operator with customers, infrastructure and network.

      They also paid the majority of the cost in Liberty Global stock. Can’t build a network with stock.

    3. Avatar Ignitionnet says:

      Virgin’s prices are competitive already. They have no need to drop them, they will simply go faster.

      Want bargain basement prices? Expect bargain basement services.

    4. Avatar No Clue says:

      “I wonder if Virgin will drop their broadband price now that FTTC is available in around 70% of homes.”

      Why would they need to it is already cheaper and faster from BT who are the number one FTTC supplier. Excluding special offers and pay upfront deals from both Virgin and BT the costs for an unlimited product from both are…

      BT FTTC upto 76Mb unlimited (£26) + Phone (£16.99) = £42.99 per month

      Virgin Cable broadband 100Mb (£20.50) + Phone (£15.99) = £36.49 per month

      They already offer something not only faster but £6.50 per month cheaper. In fact you can even have Virgins 152Mb which is more than double the speed of FTTC infinity with a phone for exactly £1 a month more.

      Virgin as Ignitionnet mention can alos dial up their speeds almost anytime they wish, so there is no need for them to chop prices at all.

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