Vodafone launches UK residential broadband service

Mobile operator Vodafone announces UK consumer broadband service as it steps up its 4G network investment

Vodafone will launch its first residential broadband service in the UK in spring 2015, using Cable & Wireless Worldwide network infrastructure.

The mobile network operator (MNO) quietly slipped the announcement into its half-yearly results. It provided only scant detail, but some have suggested Vodafone's network could cover up to 60% of UK homes.

Vodafone said it had access to fibre passing 42 million homes, or 29% of households in Europe. The company claimed 4.4 million households already use its fibre broadband services in Ireland, Italy, Portugal and Spain – as well as in the Netherlands, where it recently launched a combined fixed broadband and TV service.

The firm previously attempted to enter the UK broadband market in 2006 with the launch of its Vodafone at Home service. However it never generated much traction for the company and the project was shuttered in 2011, its customers transferred to Plusnet.

Network investment amid declining business

Meanwhile, Vodafone’s £19bn Project Spring network investment programme is in full swing, but has not yet translated into meaningful results for the mobile network operator, which reported a 3% fall in organic revenues and a 10% fall in EBITDA.

In the six months to 30 September 2014, Vodafone made sales of £20.75bn and earnings of £5.9bn. These figures reflect the declining business in Europe, where service revenues, mobile service revenues and fixed services revenues dropped.

Vodafone blamed continued competitive headwinds and difficult macroeconomic conditions, but said there were signs of improvement in its commercial execution and returning stability.

Acknowledging the firm’s troubles, group chief executive Vittorio Colao said there remained much work to do, “to build a differentiated service for customers and improve perception”.

4G ambitions

“Today in Europe, only 6% of our customers are using 4G. In the next 18 months we will reach 90% 4G coverage in Europe, giving us a great opportunity to increase penetration, stimulate data usage and grow customer spend,” said Colao.

The two-year Project Spring programme has already seen 21,000 4G sites and 38,000 high-capacity backhaul sites added to Vodafone’s network since September 2013.

Its 4G mobile network now covers 59% of the population of Europe, up from 32% this time last year. Vodafone claimed 82% of data sessions now run at speeds of over 3Mbps.

Its 10.5 million group-wide 4G customers are, on average, using between two and three times as much mobile data as they would have done with 3G.

On the enterprise side, Vodafone said it would continue to focus on strategic growth areas and exploit the tendency among corporate customers to look to mobility. Vodafone Global Services booked some significant contracts during the first six months of the financial year, including new services for British Gas, Aviva and Robert Bosch.

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