Vodafone UK’s Shelved Broadband Pay TV Ambition Costing it Millions

The recent decision by Vodafone to shelve their plans for launching a broadband based Pay TV service in the United Kingdom (here) looks set to cost the operator millions of pounds, due to the early termination of contracts for premium TV content and channels.

According to The Telegraph, sources at multiple different broadcasters claim that Vodafone had signed related TV content / channel contracts and many of these were for 3-year terms. However the somewhat 11th hour decision not to proceed with their product launch means that the operator will face penalties for breaking those agreements early (this is the second time that Vodafone has abandoned a proposed IPTV service in the UK).

The news appears to confirm that Vodafone’s decision to shelve the service is more than a temporary pause. However the recent rumours of fresh talks over an asset swap or merger with cable operator Virgin Media (here) could be one way for them to re-enter the market, without having to renegotiate the same TV agreements. But for now the operator will have to remain a triple-play provider, while it tries to figure out what to do next in the UK.