Vodafone introduces broadband in the UK

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Starting with its existing mobile customer base, the British owned company will provide broadband and home phone services from later this summer.

It's an ambitious undertaking for the UK's third largest mobile operator, especially as they're not currently leading the way on either price or speed.

They want to be a leading provider of consumer communications and entertainment services, but their packages may not be competitive enough to challenge established UK providers.

How does Vodafone compare?

Existing customers can have 17Mb at £5 a month, with non-Vodafone customers getting that for £10 when it becomes available to them later in the year; 38Mb connections will cost £15 (£20 for non-customers), and 76Mb fibre will be £20 (£25 for non-customers).

Contracts are 18 months long, with a £5 discount for the first 12 months on each tariff. Line rental is the same as BT's at £16.99 a month, and there are no bars or usage caps.

The service will initially be offered to existing Vodafone UK customers in Manchester, Berkshire and parts of Hampshire and Surrey, followed by Essex, Hertfordshire and Yorkshire.

Vodafone are expecting to launch broadband to new customers later in the year.

Chief Executive Vittorio Colao was modest about Vodafone's new offering, describing it as a "defensive reactive move" against BT.

Perhaps that's because there's nothing that stands out as exceptional in their packages.

Vodafone offer "me too" prices at best, when competitors like BT can ask for as little as £7.50 for 38Mb unlimited broadband.

Relying on the Openreach network, they can't offer anything special in terms of speed either, compared with Virgin who offer the fastest widely available broadband in the UK with 152Mb.

That said, the more unique features on offer are exciting.

Beamforming technology, for example, means that instead of broadcasting a signal over a wide area they can concentrate it and aim it directly a target. Stronger, focused, Wi-fi signals can be sent to compatible devices wherever they are in the home.

The router and what Vodafone describe as a "unique internet companion app" gives customers control over the devices in the home.

A "boost" lets customers prioritise Wi-fi device speeds for up to two hours.
And "Family Time" allows customers to manage and set time limits over the Wi-fi.

Liberty Global and Vodafone

As well as offering these new home broadband ideas, there's speculation that Vodafone aim to join their UK mobile network with Virgin Media's cable network.

If that happened it would present a major challenge to BT.

Vodafone have already said they are eager to "beef up in broadband". So it makes sense to consider a deal with a provider who is third behind BT and Sky in size, with five million subscribers on their own superfast cable network.

Vodafone have confirmed they are "in the early stages of discussions" with Liberty Global, the American company who bought Virgin Media in June 2013, about unspecified asset swaps.

A potential deal may go even further, with billionaire chairman John Malone's recent comments that Liberty Global would be a "great fit" for Vodafone's European business.

But whether it's a £120 billion merger or an asset swap, Olaf Swantee, the chief executive of EE, sees the venture as another defensive move from Vodafone in the wake of a BT-EE deal that's "clearly changing the market already".

Ready to compete in quad-play

Quad-play - mobile, fixed-line telephony, broadband and television services - is the dream deal for providers. It means they supply all the communication services a household needs.

Virgin Media were the original quadruple player: having formed from a merger between NTL, Telewest, they soon began to offer Virgin Mobile using what was then T-Mobile's network, and is now EE's.

Now BT have made their own move into quad-play, buying EE for 12.5 billion, and introducing BT Mobile, a 4G consumer mobile phone service backed by EE's national network.

And with Sky also launching a plan to introduce a mobile phone offering next year, it's somewhat unusual for Vittorio Colao to say that "real quadruple play has not yet started in the UK".

But perhaps he's referring to Vodafone's own imminent arrival on the scene, looking ahead to when they start selling "a good bouquet" of TV content later this year.

Whatever he means it's another area where Vodafone will soon be challenging BT.

But if they really want to compete, Vodafone may need to reconsider the prices and the speeds they offer.