The UK’s Post Office plans to launch a broadband service later this year, under a four year strategic partnership with the country’s incumbent telco, BT Wholesale, it was announced Thursday.

The advent of the internet and increased competition in the courier services space have been putting downward pressure on the Post Office’s traditional business. The proposed broadband service will build a range of new services and products offered by the delivery firm.

Entering an already competitive broadband market at this relatively late stage is expected to pose significant challenges, but the Post Office benefits from both a brand steeped in trust and an extensive physical distribution network.

Alan Cook, the Post Office’s managing director, said: “The agreement provides the platform to enhance the Post Office’s existing HomePhone service,” which offers low line rental prices and discounts against favourite numbers.

HomePhone’s 400,000 customers will continue to receive their bills and all other customer support from the Post Office under the new agreement with BT Wholesale. However, next month, the Post Office will launch a new price and service package that will strengthen its existing HomePhone offering.

“Work is already underway by the Post Office to launch a broadband service in the autumn that will compete head to head with the major players in the market,” the company said.

The broadband announcement was overshadowed somewhat in the mainstream press as the UK government confirmed the Post Office would close 2,500 (one fifth) of its “unsustainable branches over the next two years. Trade Secretary Alistair Darling said the Post Office was losing £4m every week. Even with the closure the remaining Post Office network has ore branches than UK banks and building societies combined.