Vodafone takes fight to BT

Telecoms giant Vodafone has vowed to take on BT in the broadband and television market.

Vodafone is to enter the consumer broadband and television markets next year. The mobile giant announced the move with its first-half results, which revealed an uptick in revenue to £20.7bn for the six months to the end of September, against £19bn the previous year.

It marginally upgraded its full-year profit forecast to £11.6bn. The shares rose by 6% on the news.

What the commentators said

"It seems there is life in Vodafone" after the "excitement" over last year's sale of its US business, Verizon Wireless, said Nils Pratley in The Guardian. The group seems to have staunched the bleeding in Europe. Revenues from voice, texts and data are still falling but the trend is improving everywhere except in Portugal.

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Vodafone "could be back in growth early next year". CEO Vittorio Colao's capital expenditure increase, required to improve 3G and 4G networks, "may have landed in time to halt the persistent drip of customer defections".

The firm has opted to park its tanks on BT's lawn, noted Nic Fildes in The Times. BT is planning to launch mobile services, so Vodafone is retaliating with consumer broadband and TV services.

Vodafone has launched quad-play' deals packages containing broadband, television, fixed-line and mobile in Europe already, but not here. They have been slower to take off in Britain because people have preferred to keep their mobile bill separate from other services.

The quad-play market is now starting to look crowded, with EE, BT, Virgin Media and Talk Talk all competing. But Vodafone looks well positioned, reckoned Alistair Osborne in The Times. It's the only player with its own mobile and fixed-line infrastructure the latter from its 2002 takeover of Cable & Wireless Worldwide.

Vodafone also "knows how to handle content", said Alex Brummer in The Daily Mail; smartphones and 4G have generated new income streams. If the market is to consolidate, Vodafone has the deep pockets and clout to do well.

Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.