Vodafone has confirmed it will launch its home broadband service next month, followed by a pay-TV offering later this year.
The world’s second-largest mobile operator is enjoying a modest return to growth, and on Thursday posted its first increase in core revenues for nearly three years.
Having acquired the UK assets of Cable & Wireless in 2012, Vodafone has spent the past year connecting the cables of what was primarily a business broadband supplier to BT exchanges around the country in order to build up a residential broadband network.
The internet service will launch regionally in June, with a national roll-out planned for the summer.
Vodafone will become the fifth company to offer mobile, home phone, broadband and television bundles in the UK, launching into an already fiercely competitive market dominated by Sky and Virgin Media. TalkTalk and BT are also growing rapidly with budget offers.
The group’s chief executive, Vittorio Colao, said: “We will have a very compelling TV offer which is going to be very modern by definition because it’s the last to market.”
He promised a small set-top box that will offer rapid switching as viewers flick channels and menus, as well as storage in the cloud on Vodafone’s servers.
The group dipped its toe into the UK home broadband market more than four years ago by wholesaling a service provided by BT, but the venture had minimal take-up and was shelved, with the customers moved on to BT’s budget Plusnet brand.
Despite its absence from the UK, following a series of acquisitions including Kabel Deutschland in Germany and Ono in Spain, Vodafone is Europe’s fourth-largest provider of broadband with 11.3 million customers. The total is still a fraction of the operator’s 122 million-strong mobile customer base in Europe.
After a long slump in consumer spending, Vodafone said its European markets have started to recover, as it reported annual results to 31 March. Across the group, organic service revenues – which exclude handset sales and the impact of mergers and acquisitions – posted a 0.1% increase in the fourth quarter, halting a run of 10 consecutive quarters of declines.
Overall annual revenues of £41.9bn and underlying earnings of £11.9bn beat analysts’ forecasts. Improvement was underpinned by demand for 4G mobile internet and a second-half return to core growth in its German and UK operations.
Colao also urged the UK to remain inside the European Union, saying efforts from Brussels to create a single digital market would help companies such as Vodafone compete with rivals from China and the US.
“As a company we think it’s in the interests of our customers and our shareholders that Britain does not leave the EU,” he said. “We are in favour of a single digital market. Fragmentation of markets is never good, expansion of markets is a good thing.”
From a standing start two years ago, Vodafone now has 20.2 million 4G customers in 18 markets, and the volumes of data carried by its masts are up 81% year-on-year in the fourth quarter.
Vodafone has committed to spending £19bn over two years on network improvements under the banner of Project Spring, with European 4G coverage now at 72% of the population. The goal is to reach 90% of the population, while in India upgrades will lead to 95% of the population in targeted areas receiving 3G.
The company is forecasting a return to growth in underlying profits for this financial year.
UK service revenue, which excludes revenues from handset sales, fell 1.2% across the year, but bounced back in the second half, achieving its first half-yearly rise since March 2012. The number of UK mobile customers fell by 1.4 million to 18.4 million, as the figures were changed to reflect inactive subscriptions.
