Vodafone to launch UK broadband and TV services

Vodafone is to launch UK broadband and TV services in the spring, it has announced.

The firm will use its business fibre network and BT infrastructure to offer the service, it said.

Meanwhile, Vodafone nudged up its full-year core earnings forecast to between £11.6bn and £11.9bn, compared with previous guidance of between £11.4bn and £11.9bn.

The firm's shares rose by more than 5.5% after its announcements.

Vodafone will use its Cable & Wireless business fibre network and BT's Openreach network to provide its broadband and TV service, a company spokesman said.

Pricing, and what TV content will be offered, has yet to be announced, he added.

Tough competition

The home broadband and TV market in the UK is already very crowded, and it may be difficult for Vodafone to compete with rivals including BT, EE, Sky and Virgin, analysts said.

"Vodafone will need to compete on price or on service, and it will be very tough for them to do that," said Mark Newman, chief research officer at Ovum.

It is very expensive to build fibre out to people's homes, he said.

Mr Newman added that if the provider was not the first or the second in the market, it is difficult to compete, because customers do not tend to change services.

However, according to telecoms analyst Oliver Johnson of Point Contact, Vodafone's medium and long-term security of revenues depend on the quality of the broadband, phone and TV service it can offer.

People want to use different devices in the home, and these products will increasingly "talk" to each other, he said. Consumers will expect that service to work well, he added.

"This is where the real emerging markets are going to come," he said. "People want to switch the alarm on, order bits for the fridge, monitor their health, and record their favourite TV programme. It all starts to get stuck together."

Vodafone has moved into more services such as fixed-line telephony, TV and faster 4G mobile as part of its Project Spring network upgrade, which analysts said had helped its overall results.

The firm said improving demand in its big European markets and an investment push into new products helped to slow a fall in revenues.

Vodafone reported second-quarter organic service revenues, which strips out items like handset sales and currency movements, down 1.5%, compared with the near 4-5% falls it recorded in the past six quarters.