[3GScottishUser]

From Telegraph.co.uk (10/09/2006):

Vodafone shuns C&W with BT broadband deal

Vodafone will this week announce a strategic deal with BT to offer its mobile phone customers high-speed internet connections in the home.

The tie-up will see Vodafone follow in the footsteps of other mobile groups such as O2 and Orange, which are rapidly reshaping the telecom landscape by outlining plans to offer a package of both fixed-line and mobile products to their customers.

But the tie-up with BT is a bitter blow to Cable & Wireless, which had hoped to secure Vodafone's business as it strives to become a major wholesale supplier of broadband services in the UK.

Under the terms of the BT wholesale agreement, Vodafone will buy the company's IP Stream product, which will allow it to offer broadband to its customers without the need to own any fixed-line network assets.

Companies such as British Sky Broadcasting, O2 and Orange have all chosen to provide fixed-line broadband by investing heavily in BT's local exchanges, a process known as local loop unbundling. O2 recently acquired Be Internet, a broadband provider, while BSkyB bought Easynet last year for £211m.

The Vodafone deal with BT is significant because it symbolises the re-marriage or convergence of fixed-line and mobile telecoms services. Over the past decade, the mobile sector has seen exponential growth at the expense of fixed-line incumbents.

However, in the past year mobile groups have returned to the fixed-line arena as they strive to offer a wider range of services to their customers.

Analysts are divided about the value of this new strategic direction, with many fearing that broadband will be an expensive distraction for mobile groups, which should be focused on growing their core services.

Spokesmen for Vodafone and BT both declined to comment.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/10/cnvoda10.xml

Now Confirmed.....

LONDON (AFX) - Vodafone Group said it has signed an agreement with BT Group, enabling the mobile phone giant to offer broadband to its UK customers.

In a move likely to intensify competition in the UK's crowded internet access market, Vodafone said it would start selling combined fixed-line, broadband and mobile products before the end of the year.

The deal, which will involve renting capacity from BT's wholesale wing, sets Vodafone apart from most other new entrants to the UK broadband arena.

Rivals like British Sky Broadcasting, Telefonica unit O2 and France Telecom subsidiary Orange have all decided to put their own kit in BT local exchanges, a process known as local loop unbundling.

It will also be a blow to struggling fixed-line firm Cable & Wireless, which had hoped to carry Vodafone's traffic on its Bulldog 'local loop' network.

Financial details of the transaction were not immediately available.

http://www.iii.co.uk/news/?type=afxnews&articleid=5775446&subject=companies&action=article

[Ben]

Press release:


VODAFONE TO DELIVER FIXED-LINE BROADBAND SERVICES IN THE UK

Vodafone today announces that it has signed Heads of Terms with BT Wholesale to provide its customers in the UK with Vodafone-branded consumer fixed-line broadband services. Vodafone expects to launch this new proposition, which will complement its existing mobile services, before the end of the year.

This partnership enables Vodafone's customers to benefit from bundled packages of mobile and broadband services nationwide, due to BT's unique footprint in the UK.

Nick Read, Chief Executive of Vodafone UK, 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."

Paul Reynolds, Chief Executive of BT Wholesale, says: "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."

[3g-g]

I think Vodafone it's a good move by Vodafone, no hassle of maintaining it, and in terms of speeds it can offer customers ADSL wise, BT probably have the edge on all the LLU boys as they still control the exchanges and when the operators can get in to install their own kit. BT could get lazy with the 3rd parties wanting in and Vodafone can clean up offering their Broadband. Looks promising I must say. I imagine we'll see the free broadband, VoIP calls and a WiFi box of some sort on a £30+ package aver the next few weeks.

[3GScottishUser]

Yep, as ever the main goal of the sensible mobile operators is to secure and maintain customers on £30-35 a month contracts. This price point is now the Holy Grail for mainstream domestic subscribers and it's not a bad slice of revenue when you think that BT only gets £11 for a landline.

If Vodafone give away broadband on £30+ mobile deals (BT Broadband) they will have a very compelling offer that will easily match Orange. They have to recact quickly as Orange are now on a roll with their deals and 02 are gearing up to follow. T-Mobile have had a feast with Flext this year and 3 having stagnated are no longer a real compeditor so Vodafone have to be up there with those at the cutting edge.