Vodafone launches home broadband in belated multiplay move

Vodafone has announced the launch of its residential fibre broadband service, Vodafone Connect, which will land for UK consumers later in the summer.

Following its acquisition of Cable & Wireless several years ago, Vodafone has made what might be considered a belated move into the broadband market, and will be offering speeds of up to 76mbps. On a conference call, Vodafone’s consumer division MD Cindy Rose was explicit in saying they’re aggressively targeting existing mobile users with a variety of benefits, perks, discounts and freebies thrown in. She then went on to give some numbers on the networking aspect of the Vodafone Connect rollout.

“In less than one year we’ve completed full technical trials, connected to more than 1,000 exchanges and have more than 20 million premises passed,” she said. “By the end of the summer we’ll have more than 22 million premises passed to give us parity with BT.”

Vodafone is also launching a companion app most likely intended for the head of the household to better control wifi usage; including giving bandwidth priority to certain devices (called “Boost”), time-based usage restrictions for other devices in the house (“Family Time”), controls over guest wifi access and finally beamforming tech (“Beam”) to boost signal wherever possible.

While positioned at a reasonably compelling £5 per month before line rental for existing Vodafone customers, analysts have been quick to note that Vodafone is likely to encounter difficulties in enticing non-existing customers into switching.

Ewan Taylor-Gibson from uswitch.com reckons Vodafone is doing the right things for the customer, but will need more in order to gain market share.

“Vodafone is offering a fibre service right off the bat, throwing in a free router, slashing the price by half for the first 12 months and promoting its Easy Switching service – showing awareness that one of the biggest barriers to switching is the fear of being left without any internet at home,” he said. “But although its pricing is competitive, it’s not the cheapest and for now, at least, its service is not widely available.”

John Delaney from IDC, meanwhile, praised Vodafone’s ambitious market entrance, but identified the need for a more thorough home entertainment service as the string missing from Vodafone’s multiplay bow.

“Vodafone Connect is certainly an emphatic and ambitious entry into the UK’s home broadband market,” he said. “However, a growing and lucrative percentage of that market is looking for a multi-play bundle, either triple-play or (increasingly) quad-play. At present, one element of multi-play is conspicuously absent from Vodafone Connect: TV. That won’t be much of a problem in the early phase of market entry, as there are plenty of low-hanging fruit to pick among potential customers who are not interested in pay TV. Before too long, though, Vodafone will need to add TV in order to remain a credible UK broadband competitor – and in particular, to compete effectively against a merged BT/EE, which looks likely to major on quad-play offerings as soon as possible after the merger goes ahead.”

Granted, Vodafone did hint at a forthcoming move into domestic TV services. However with BT’s growing market share in the form BT TV, particularly with its upgraded sports TV services, Vodafone will need a unique, compelling and competitively priced TV service in order to gain ground on the three market leaders in UK TV, being Sky, Virgin Media and BT.

Responding to a question from Telecoms.com, Rose indicated that a multiplay strategy focussing on TV will form a core aspect of its strategy for enticing non-Vodafone consumers, but was coy on giving specific details.

“We started with our existing customers as a way of giving them first access to the product and to thank them. Our plan is to open up to new-to-Vodafone customers later in the year, and that will be supported by an appropriate level of above the line marketing,” she said. “We will be following with TV later this year, but I can’t say any more right now.”