Mobile operator Vodafone is to roll out broadband and fixed-line telephony services in a major tie-up with BT in a move that will further intensify competition in the UK's high-speed internet access market. Unlike other new broadband market entrants—such as BSkyB, Telefonica's 02, France Telecom's Orange and Carphone Warehouse—Vodafone will lease telecommunications capacity from BT Wholesale rather than placing their own equipment in BT's local exchanges (the process known as local loop unbundling).
Vodafone's decision to go with BT Wholesale is a blow to Cable & Wireless' broadband division, Bulldog, which earlier this year announced plans to become a major wholesale broadband services provider.
Vodafone said the partnership with BT—which builds on BT's agreement with Vodafone in 2004 to create a mobile virtual network operator (MVNO) and become BT's mobile partner in its fixed mobile convergence (FMC) activities—would enable it to offer customers bundled packages of mobile and broadband services nationwide, due to BT's network, rather than limit itself to major towns and cities.
Vodafone UK CEO Nick Read said: "Today's announcement is a strategically important step in the evolution of Vodafone's business in the UK. Choosing BT as our partner enables us to provide high quality fixed-line broadband services to customers quickly and cost-efficiently right across the UK, and this perfectly complements our national mobile coverage and mobile broadband service.
"This news is further evidence of Vodafone delivering on its strategy and providing its customers with a total communications solution wherever they are."
BT Wholesale CEO Paul Reynolds said: "Today's announcement by Vodafone builds on BT Wholesale's unique capability to deliver strategic, managed solutions for our customers across the industry. It's also an excellent example of how BT's range of capabilities in communications can be deployed, in partnership with our wholesale customers, to enable them to bring choice, quality and value to their customers in the competitive, converging world of the 21st century."
Vodafone has 16.2m customers in the UK.
Lovelace Consulting | 11.09.2006